Insights > Technical analysis > Altcoins continue to surge higher! A bounce to come on Bitcoin?

Altcoins continue to surge higher! A bounce to come on Bitcoin?

12 May 2021

temps de lecture 4 minutes

avatar-auteurManuel Valente


The “altcoin season” has never been more appropriately named! In this month of May 2021, many cryptocurrencies are performing impressively and it is not uncommon to see +200 or +300% in a single week. On Bitcoin on the other hand, the numbers are much more modest. The king of cryptocurrencies has been quiet for three months. It is again stable over a week, and quotes around €47,000 ($57,000) this May 12. Despite a flash crash that occurred in the evening of May 10, the crypto market is showing its resilience and remains in a long-term uptrend.

For the past few weeks, Ethereum has been stealing the show. The asset continues to break records, at €3,600 (or $4,300). Its share of the cryptocurrency market capitalization continues to rise, at the expense of Bitcoin’s. Despite the still high fees for using the Ethereum network, the enthusiasm does not subside. Moreover, it is interesting to note that the strong increases in altcoins do not all occur at the same time. We are seeing successive rises depending on the sectors of the market. While decentralized finance cryptocurrencies like Aave and Uniswap were making strong gains a few weeks ago, it’s now the turn of older assets like EOS or Ethereum Classic to show impressive increases. Not to mention the sudden and extreme increases on altcoins with little capitalization or without fundamentals, which still suggest the beginning of a speculative fever on this market. The recent sharp price fluctuations in Dogecoin are a perfect illustration of this.

This observation should allow us to remain exposed to this high potential market, without forgetting the risks of a forthcoming drop in prices. Indeed, we don’t necessarily see new money coming into the market, but rather existing capital that seems to rotate and move from project to project, to take advantage of successive price increases. It would not be surprising to see Bitcoin return to the forefront of the market in the near future, once again generating the best performance while altcoins take a break. Read on for detailed analysis of Bitcoin, Ethereum and Avalanche.

  • According to CoinGecko, the market capitalization signs new records, at 2550 billion dollars against 2350 last week.
  • Bitcoin’s dominance continues to fall to 42% market share from 43.6% last week.
  • The best performance of the top 50 is attributed to SafeMoon with +131% over one week.

We invite you to discover our video analysis (in French and dated from May 11):

Bitcoin (BTC)

The Coinhouse recommendation :
Wait

  • Bitcoin remains broadly stable at around €47,000 ($57,000) on May 12, although it is up 6% from last week. The resistance zone between €46,400 and €48,000 ($56,000 and $58,500) is still holding the price. Two scenarios are possible: either the bullish market trend shifts back to Bitcoin and the price starts to rise again, in which case we will wait to see the price end a day above $60,000 before resuming buying positions. Or there is a global decline in the market and the price breaks the bullish channel highlighted on the chart above. In this case we will look at the area between 35,200€ and 39,000€ ($42,500 and $47,000) to make medium/long term purchases.

Ethereum (ETH)

The Coinhouse recommendation :
Hold

  • Ethereum (ETH) is literally exploding upwards since the end of April. The asset gained another 32% this week to quote around record prices: €3,600 (€4,300) this May 12. Since we went back to buy when the signal was given to cross the €2,250 ($2,700) mark, the rise has been meteoric. We advise to wait this week on Ethereum and let the price find a resistance zone. This could happen before the end of May. Only then will we take partial profits. It is not impossible that this resistance will not materialize before the $5,000 round zone given the current powerful rise on Ethereum.

Avalanche (AVAX)

The Coinhouse recommendation :
Buy if $44.80 is crossed

  • Avalanche (AVAX) is up again this week with a 30% increase. The asset is trading around €32.60 ($39.50) on May 12. It has been in a range (horizontal interval) between $20 and $40 since early March. The more cautious will want confirmation of a breakout from this range from above before buying or strengthening positions on AVAX. We will therefore wait for a clear break of the $40-45 range (i.e. €33-37). Less likely, however, is the possibility of a more pronounced decline on AVAX. In this case, we will wait for the bottom of the range, around $20 (i.e. €17) to buy back in a medium-long term perspective.

Tops & flops of the week (top 50 marketcap)


Tops

1- SafeMoon : +131%
2- EOS : +106%
3- Polygon (MATIC) : +61%


Flops

1- Dogecoin (DOGE) : -10%
2- OKB : -5%
3- Uniswap (UNI) : -4%

All information in this article is provided for informational purposes only, although it has been compiled from reputable and reliable sources. It does not constitute an offer to buy or sell digital assets, nor does it constitute an offer to provide services in respect of digital assets, nor does it constitute advice, inducement or recommendation to deal in such digital assets. It constitutes simple information that is under the user’s absolute control. We inform you that if you choose to invest in digital assets, you must be aware of our general terms and conditions of sale (https://bit.ly/2FGW2ek) and accept the various risks listed and defined on our legal warning page (https://bit.ly/3c4sQKc)

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