The cryptocurrency market today witnessed an impressive move from Ethereum, surpassing the psychological threshold of $4,200, prompting experts to predict that a new record price could be set in just a few days. This strong upward momentum coincides with a broad recovery trend in the altcoin market, as Bitcoin gradually loses its dominant position.
Positive Signals from the Decline in Bitcoin Dominance
The Bitcoin dominance index (BTC Dominance) a measure of Bitcoin’s market capitalization relative to the total cryptocurrency market is currently hovering around 60.5-61%. This range is considered a key support level by technical analysts.
Many experts believe that if Bitcoin dominance falls below this level and is confirmed through a three-day closing on the chart, the market will officially enter an “altcoin season,” a period during which alternative coins tend to outperform Bitcoin. Historically, Ethereum has greatly benefited in such scenarios.
Technical Analysis: ETH in a Favorable Position
From a technical analysis perspective, Ethereum has successfully converted the important resistance zone of $3,900-$4,100 into a strong support level. However, solidifying this position will require additional time to confirm its sustainability.
If the new support level is firmly established, ETH will have a strong technical foundation to aim for the next target challenging the recent peak at $4,900. Given the current momentum, reaching this price could happen within a few days instead of taking weeks as initially expected.
Related: Why Bitcoin Could Hit a New All-Time High This Week?
Warning of Short-Term Adjustments
Despite the positive outlook, investors should be aware of warning signals from the daily Relative Strength Index (RSI). This indicator is showing signs of bearish divergence a technical signal often indicating the potential for short-term corrections.
Experts assess that a slight pullback to test lower support levels is entirely normal before ETH continues its strong upward journey.
Supporting Factors from the Market Context
Ethereum’s impressive rally is not only based on technical factors but is also supported by several positive fundamental drivers:
First, there is increasing interest from institutional investors in Ethereum and its ecosystem. Second, Layer 2 scaling solutions are being widely deployed, addressing the issues of high transaction fees and slow speeds two significant weaknesses of the Ethereum network.
Finally, Ethereum’s central role in DeFi and NFTs remains strong, providing a solid foundation for long-term demand for ETH.
The combination of these technical and fundamental factors suggests that Ethereum’s current price increase could be just the beginning of a stronger and more sustainable growth cycle in the near future.
