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Ethereum has just made history. It printed an incredible $59.21 billion in 24-hour derivatives, surpassing Bitcoin's $56.33 billion for the first time in a long time. This is not a small anomaly traders can just ignore, as it portends a potentially profound change in the market's focus. ETH has been progressively recovering in terms of price from a decline that began in mid-June.
Ethereum is consolidating above key moving averages on the daily chart. The 50, 100 and 200-day MAs are stacked below price action, providing layered support. Before ETH becomes overbought, there is still plenty of room, even though the RSI has remained in the neutral-to-bullish zone (most recently printing at 57). Prior breakout attempts have failed, and the price is now moving into the $2,600-$2,700 range.
However, the situation is different this time around: open interest has increased by +7.63% in a day, indicating the entry of new leverage into the market, and liquidity is increasing. One important point: the Altcoin Season Index is at its lowest point ever — 27. Altcoins typically do better in the weeks that follow when this index bottoms out.
In essence, the market is still in Bitcoin Season, but this early volume dominance by ETH may portend a rally led by altcoins. In such a scenario, Ethereum is expected to lead the subsequent upward leg, possibly breaking through the $2,800 resistance and aiming for the psychological $3,000 mark.
Despite the fact that it is too soon to call for a sustained altcoin season, the combination of rising open interest, a clear change in volume leadership and historically low altcoin sentiment suggests that Ethereum may gain traction in the future. But traders need to maintain realism.
Because breakouts have dwindled below $2,800 on multiple occasions, a return to the $2,400-$2,500 range is possible if this level is not turned into support. In summary, Ethereum has taken center stage. Volume sustainability and Bitcoin's ability — or lack thereof — to regain its dominance will determine whether this is a temporary speculative frenzy or the beginning of a structural trend reversal.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team