Ethereum confirmed a strong bullish signal yesterday after closing the daily candle above $ 2,400. In fact, the crypto asset has overcome its psychological resistance for the first time since June 14. Historically, when this happened, Ether also triggered minor rallies in altcoins.
We analyzed some of the major correlated assets with Ethereum to see if collectively the best altcoins are showing any signs of a resurgence. (Note: we are analyzing altcoins that have a correlation of 0.85 or better with Ethereum)
Ethereum Clearing Levels
In this article, we’ll take a look at Uniswap and Cardano, as these assets have a correlation of over 0.85 with Ethereum. Ethereum Classic will also be considered, primarily because it offers a really interesting example in comparison to the others.
These correlations are based on the long-term price movement between these altcoins. Hence, they develop over a period of time.
Now, watching the one-day Ethereum chart, it is clear that the asset breaks above the double bottom pattern when the token closes above $ 2,400. Ethereum has been rallying for 10 consecutive days, which indicates stronger bullish momentum.
By comparison, Cardano still lags behind its immediate $ 1.50 resistance. This means that buying pressure has not yet raised his valuation above the safe zone. In comparison, the sales volumes of the competing asset were also lower.
With Uniswap, the difference seemed to be much higher as the cryptocurrency was trading well below the $ 25 resistance. Now, while the Relative Strength Index, or RSI, did indicate a surge in buying pressure, it has yet to capture a bullish trend reversal.
Case for Ethereum Classic
One particular asset worth mentioning here is Ethereum Classic. The ETC, Skew said, had a particularly low correlation of 0.535. However, since May 19, ETC has been closely monitoring the movement of the Ethereum price. This suggests that a new correlation may be unfolding in the industry.
Hence, it can be concluded that Ethereum is not yet triggering an altcoin rally because the trend is still extremely finicky about creating a solid bullish base.
At the time of writing, Bitcoin is trading well above $ 41,000. If this continues, it will be noticed by the broader cryptocurrency market. As for Ethereum, a strong altcoin rally could reverse after ETH breaks $ 3,000 as it will bring more liquidity and capital to the broader altcoin market.