The dominance of USDT+USDC also indicates a likely continuation of the crypto market correction in the coming week. Confirming corrective expectations for #BTC, and for#ETHand#SOLas the top altcoins in terms of capitalization and market share.
We had correctional expectations for all three assets from the beginning of the week, as we wrote about in previous posts. But where our expectations did not work out - there was no rush to the news about the approval of the spot Ethereum ETF, and the correction in the market itself now promises to drag on for a week, and not go through a long squeeze.
Now the day has seen a stable downward structure for both BTC and ETH with #SOL. Over Friday and the weekend (as the period of the week most susceptible to manipulation), downstream structures for all three assets will either receive confirmation or be invalidated. We bet on the first option.
The last time we analyzed the dominance of key stablecoins was on May 15th. Then they focused on the importance of the EMA of the 50 day TF and wrote:
“There have already been several tests of the EMA 50 day TF in April and May and the dominance has rebounded, forcing volatile crypto assets to correct. If this time the support is broken, a pump may occur in the crypto market. Because there are no other moving averages below and the nearest important support is the global uptrend since June 2019. It is now at 5.68%. Next come volume levels and a couple of local trend levels.”
We gave chances for a rebound from the EMA of the 50 day TF, but only to the nearest resistance and beyond - still with a move down to the trend line. As a result, there were no rebounds, the EMA was broken and the dominance of stablecoins came to test the same global trend since June 2019 (indicated by a dotted line). Having reached 5.58% at the moment. By the way, this is how a quite expressive civil engineering plan was worked out, formed in April-May, which we initially did not notice.
The script worked, what next?
For further market growth during the emerging rebound, the dominance of#USDT+#USDCshould not consolidate above the EMA of the 50 monthly TF (currently 6.64%) and above the EMA of the 200 weekly TF (currently 7.07%). Squeezing above is appropriate, but fixing candles with bodies on the corresponding TFs is not.
An important test for the bulls will be a repeated attempt by the dominance of stablecoins to break through the EMA of the 50 day TF as resistance. The last attempt on May 18-20 showed the failure of this EMA and an impulse decline in dominance to the global trend. What gave the market growth. If this time we fail to break through this EMA as resistance, we may see an early reversal of TOP assets upward, a breakdown of their descending structures during the day. In relation to BTC, this is scenario No. 1 from today's review.
In fact, the dominance of stablecoins is now squeezed between this EMA and the indicated global trend line. A breakout in one direction will determine the movement of the crypto market for at least the next week.