Ethereum (ETH) is ready to decline even under the bullish case. As much as the bulls would like to think that the price is going to shoot past the strong trend line resistance shown on the daily chart for ETH/USD, I think the next few days are going to show them that it is not going to happen. Instead, they will see that the price is declining and when that begins to happen, you will see a lot of popular accounts on Twitter drawing this falling wedge on their charts. Now, there is a descending channel that could be drawn as well but considering that the price did not fall down to it and rallied straight towards the trend line resistance, I would not lay too much emphasis on this channel.
The price had a hard time rallying past the 38.2% fib retracement level even without the trend line resistance but now it has become even more difficult and a fall towards the bottom of the falling wedge is not only probable but a lot of traders would be willing to make their peace with it in anticipation of a big move to the upside from there. To be fair to the bulls, I agree with that. I do believe that the price is going to break out of this falling wedge and test the 38.2% fib retracement level once again. I don’t think it is going to happen at this point but it is very likely to happen after the price starts a recovery from the bottom of the falling wedge. It is pertinent to note that longs vs. shorts ratio for Ethereum (ETH) still remains 80% to 20% in favor of the bulls.
Dominance has recently been a big debate. A lot of traders have started to lay too much emphasis on it which is a good thing because it matters a lot. The daily chart for Altcoin Dominance (Others.D) shows that despite the recent relief rally in the market in general and altcoins in particular, altcoins remain in a strong downtrend as they keep losing their dominance to Bitcoin (BTC). This is only reasonable to expect considering the market is poised for significant further downside until it bottoms.
We have seen most of the time in the past that whenever Bitcoin (BTC) declines, altcoins decline even harder. If Altcoin dominance is falling and Bitcoin dominance is rising, this means that we are likely to see further downside in the market. Bitcoin (BTC) is currently holding its ground better than most cryptocurrencies and when it starts to fall, altcoins like Ethereum (ETH) are going to fall even harder. Most of the useless ICOs on Ethereum (ETH) will be at a very high risk of bankruptcy when that happens and that might be the maximum pain that the market is going to inflict before we see the next bullish cycle.