ETH’s Strength Inspires Altcoins to Follow
- Ethereum (ETH, Tech/Adoption Grade “A”) is showing some serious strength since Saturday.
- Polygon (MATIC, Tech/Adoption Grade “B-”) has reclaimed the $2.00 level and will look to establish it as support.
- Solana (SOL, Unrated) is moving once again today and is up close to 10%.
Ethereum is flexing its muscles as it attempts to lead the market yet again today. ETH has been moving against BTC for a while now and appears to be breaking out on the ETH/BTC chart.
That is usually a sign that altcoins are likely to start moving again. That appears to be the case today.
Ethereum has shown real strength in the face of what could have been a market wide correction event, completely recovering from recent correction lows near $4,000. It’s currently trading near $4,700 and is knocking on the door of a new all-time high.
Additionally, this week Denver-based investment firm Kelly Strategic Management filed for an Ethereum futures-based exchange-traded fund (ETF). Given the fact that the Bitcoin futures ETF was just approved, this filing by Kelly has a fair shot at approval.
An ETF product could push Ethereum to new heights, but this decision likely won’t be made soon.
Here’s ETH in U.S. dollar terms via Coinbase (Nasdaq: COIN):
In fact, Ethereum has been outperforming Bitcoin so well over the past weeks that Bitcoin dominance is on the verge of dipping below 40%.
Usually when that happens, altcoin season isn’t far behind. And this pattern wouldn’t actually be so different from what took place in the last bull market of 2017.
Around the late fall of 2017, we saw altcoins breakout, after which Bitcoin blasted off to what would be its cycle high of $19,000. Another altcoin season followed once Bitcoin cooled.
We could be on track for a repeat here over the next few months, as we’re already seeing some altcoins pop off.
MATIC shot up 16% on the day at the time of writing to cross above the significant $2.00 level.
MATIC has only traded above $2 for less than 10 days in its history.
If MATIC can turn $2.00 into support, it could break through its old all-time high and enter price discovery mode. That’s when we discover just how high the price can go before facing resistance.
Perhaps this is Polygon finally sticking its name into the smart-contract race. Over the past few months, we’ve seen Layer-1 platforms skyrocket in price, but Polygon hasn’t kept pace. At least, not until now.
Here’s MATIC in U.S. dollar terms via Coinbase:
MATIC is in good company when it comes to smart-contract platforms performing well.
Solana is up more than 10% at the time of this writing. After dipping to a low of $180 just four short days ago, SOL ripped all the way to $230 so far today, showing that same strength it did back when its run started in September.
Many people online are praising the ease of use of Solana, the cheap fees and the good user experience and interface of its decentralized applications (dApps). While some questions remain about other technical aspects of Solana’s blockchain and security, it’s obvious that there are many fans of the platform so far.
The smart-contract protocol sector appears increasingly likely to have multiple winners down the line as opposed to a “winner take all” mentality that many analysts used to have.
A close above $220 would be important for Solana. That’s the only clear resistance level on its chart between $200 and all-time highs.
But most important is that SOL continues to establish a pattern of green candles. After all, another positive day tomorrow would go a long way for the momentum of this altcoin.
Here’s SOL in U.S. dollar terms via Coinbase:
For most altcoins, it appears that we’ve finished with the recent correction, but we aren’t definitively out of the woods yet. There’s still the potential that an underperforming Bitcoin could drag this market down with it.
BTC really needs to get back above $60,000 at some point in the next few days to take some pressure off the rest of this market.
For now, though, let’s appreciate the crypto market’s recent strength despite the factors currently plaguing the traditional markets.