Altcoins Display Resilience But Ethereum’s Momentum May Decide Market Direction

Altcoins are showing signs of strength on Tuesday after the global cryptocurrency market cap recorded a recovery on the daily charts.

According to Michaël Van de Poppe, CEO and founder of MN Trading, resilience in altcoin prices may not be a significant development unless Ethereum gains momentum.

Altcoin can have a strong Q1

The executive explained in a tweet on X, “Money flow from Bitcoin to Ethereum, through which altcoins are going to have a great Q1 and Bitcoin dominance peaks.”

Ethereum (ETH), the second-largest player by market capitalization, is trading between the 24-hour range of $2,140 and $2,251 at press time. It remains almost 55% down from its record peak achieved in November 2021, based on CoinGecko analysis.

Ethereum’s market cap currently stands at approximately $260 billion, with a circulating supply of 120 million ETH. An analysis based on IntotheBlock data also presents a weak outlook for Ethereum.

The overall exchange and on-chain signals are predominantly bearish. However, 74% of Ethereum holders are profiting at its current price, with only 1% breaking even and 25% experiencing losses.

Ethereum signals. Source: IntotheBlock

Ethereum lacks momentum

While Ethereum presents sluggish price action, Van de Poppe anticipates this will change in the coming weeks. He predicts a shift in money flow from Bitcoin to Ethereum, potentially leading to a prosperous first quarter for altcoins.

#Altcoins show strength, but it might not be anything yet. $ETH isn’t showing any momentum, which I think is going to change in the next weeks.

Money flow from Bitcoin to Ethereum, through which altcoins are going to have a great Q1 and Bitcoin dominance peaks. pic.twitter.com/Xwftgv0dfg

— Michaël van de Poppe (@CryptoMichNL) December 19, 2023

The recent Digital Asset Fund Flows Weekly Report highlighted a general trend of $16 million in outflows. Within this trend, Ethereum experienced a withdrawal of $4.4 million. Bitcoin dominated the profit-taking at $33 million, but altcoins defied the trend with an inflow of $21 million.

Despite these movements, Bitcoin maintains its stronghold in the market, commanding over 53% of the total market share. This continued dominance implies that altcoins, despite their recent positive inflow and investor interest, might still face a delay in capturing a more significant portion of the market’s capitalization. Especially when the resilience of altcoin prices hinges significantly on Ethereum’s performance.

Ethereum’s positive price shift could be pivotal for the overall altcoin performance in the first quarter.

Source