Ethereum has finally risen after breaking through a critical resistance level that has kept the price low since early August. The move changed market sentiment as many investors and analysts had previously doubted ETH’s potential in the current cycle, expecting it to underperform. However, Ethereum’s recent strength is beginning to change these prospects.
Renowned analyst and investor Ali Martinez recently shared findings indicating that while Ethereum’s momentum is picking up, the long-awaited “Altseason” has not yet arrived.
According to Martinez, Bitcoin typically outperforms Ethereum and other altcoins at this point in the cycle—a common pattern as BTC often leads market rallies. This dynamic could present a strategic opportunity for investors looking to get into ETH and other altcoins before the euphoria in the broader market sets in.
As Ethereum gains momentum, market participants are watching for further confirmation of its breakout, with many believing that once Bitcoin’s lead cools, capital could flow more aggressively into altcoins.
Ethereum wakes up
Ethereum is making a remarkable comeback, rising over 22% in just two days of strong upward momentum. While these numbers are impressive, key data shows that Bitcoin is still leading the market, slightly eclipsing Ethereum’s gains. For savvy investors, this could present a great opportunity to start accumulating Ethereum and picking altcoins before they potentially surge in the next phase of the cycle.
Ali Martinez, a renowned analyst, recently shared a Glassnode chart revealing insights into the “Bitcoin Altseason Indicator.” This tool compares net capital flows between Bitcoin and Ethereum, showing that while Ethereum is on the rise, Bitcoin’s net capital change is currently outpacing it.
This trend confirms that the altseason, in which altcoins outperform Bitcoin, has not yet begun. Martinez notes that this dynamic is typical for this stage, with Bitcoin typically leading the initial rally, followed shortly thereafter by Ethereum.
Historically, altseason often occurs when Bitcoin’s price action stabilizes, with capital flowing out of Bitcoin and into high-potential altcoins. Many savvy investors see this part of the cycle as an ideal time to accumulate ETH and strong altcoins at attractive prices before the broader market shifts its focus.
The relationship between the performance of BTC and ETH will be closely watched in the coming weeks, potentially leading to a shift in market sentiment and capital allocation.
ETH Technical Review
Ethereum recently broke through critical resistance at $2,820, breaking through the 200-day exponential moving average (EMA) and touching the 200-day moving average (MA) at $2,955. This marks a significant bullish move as ETH has been trading below these levels since early August and a recovery in these numbers is seen as a positive signal for further growth.
For the bullish momentum to continue, ETH must break higher and hold above the daily MA at $2,955, cementing this breakout as the basis for the next leg of the uptrend. However, some analysts suggest that a period of consolidation just below the 200 MA could be beneficial, allowing ETH to gain strength for a more sustainable rally. This pause could soften the growing euphoria and avoid overexertion in the short term.
As market sentiment becomes increasingly bullish, many investors are keeping a close eye on this level. Staying above these critical numbers will give bulls more control, potentially setting the stage for a more sustainable recovery for Ethereum as it targets new highs.
Featured image from Dall-E, chart from TradingView
