Ethereum price rises above $2150, has vital impact on its prediction
- The expectations of a rapid rise in the altcoin market capitalization were supported by technical analysis.
- Some selling pressure could depress Ethereum’s prices in Q1 2024.
The crypto market has been on fire since mid-October. Bitcoin [BTC] saw a giant increase in trading volume as bulls poured in and forced prices to smash the $29.8k resistance to smithereens.
Since then, large-cap assets such as Ethereum [ETH] have also performed well.
A bird’s eye view of the crypto market at large, as well as the altcoin market, could help put where we are right now in perspective. In that endeavor, the market capitalization of the total crypto market and that of the altcoin sector was examined.
The highs from October and August 2022 were breached
The market capitalization excluding BTC and ETH is the altcoin market cap. The $413.8B and $453.9B had been highs from October and August 2022 respectively.
At press time, the market cap has beaten both these levels. The weekly chart showed that the next significant level was at $839.1B. A move here would mean the market cap gained more than 80%.
During the previous cycle, the altcoin market cap highs set in 2018 were respected till September 2020. Thereafter, it was flipped to support, and the market continued to soar till late 2022.
It is thus possible that the same scenario could play itself out once again, and that the $839B resistance might not pose much of an obstacle once the bull run is in motion.
Assessing the timeline
The cycle in 2018 took 175 days to complete before beginning to reverse. The one in 2021-22 took 413 days.
Hence, an argument could be made that as the market matures the cycle duration also lengthens, while the magnitude of gains (in percentage terms) reduces.
Taking this logic forward, the next run could take much longer than 400 days, and it was unclear just how high the total crypto market cap could reach.
A conservative estimate based on the Fib extension levels plotted in the chart above showed that $5T was possible, but much higher gains are possible too.
Examining the state of the altcoin king
It is a widely held belief that an ETH rally comes alongside an altcoin market-wide rally. Therefore, taking a look at how Ethereum is shaping up could be helpful.
In the long-term, meaning over the next two years, a large price appreciation across the market seems inevitable.
In the coming weeks, however, it would be prudent for ETH holders to book some profits. The MVRV ratio was climbing toward the early 2023 highs.
Realistic or not, here’s ETH’s market cap in BTC’s terms
This meant that a large chunk of ETH holders were sitting on unrealized profits. This could add to any selling pressure Ethereum faces as they look to book profits.
Therefore, Ethereum could experience some turbulence in the next month or two as the high MVRV ratio readjusts. Yet, based on the earlier evidence, the crypto market seemed headed inexorably higher.