The cryptocurrency market kicks off 2025 with a few red days, pushing some assets into a bearish dynamic and back below key technical support levels. This raises the question of what trend the market could experience in the coming weeks, especially after the inauguration of Donald Trump as President.
Total Crypto Market Cap in a Consolidation Phase
Currently sitting below a resistance zone around $3.7 trillion, a range seems to be forming in the market, with support located around the $3 trillion level (a former weekly resistance). This dynamic reflects a wait-and-see stance from the market and consequently, decreased excitement following the US presidential election victory of Donald Trump.
Market participants appear to be realistic, waiting for the inauguration and first actions that will be taken by the president-elect once he sets foot in the White House. For now, we are seeing a contraction in volatility, which means that sooner or later, a new dynamic with a strong move can be expected in the coming weeks.
Bitcoin Dominance Still Below Resistance
Bitcoin dominance has been in a rather stable dynamic since last week, similar to the rest of the crypto market. It continues to evolve around 57% dominance, a zone where there is a technical confluence with the 13 & 25 EMA.
Ideally, a return below 54.40% will be a first step in favor of a long-term bearish trend reversal in bitcoin dominance.
As for the ETH/BTC pair, we will have the opportunity to look at it next week since at present, there have been no changes or signals to anticipate a trend reversal. Ethereum continues to underperform the king of cryptocurrencies, which should be maintained as long as BTC.D does not clearly opt for a strong bearish leg.
A Pivotal Moment for Decentralized Finance
The DeFi sector is in a rather favorable configuration compared to other charts. Here, we are building technical support around $115/118 billion, around a resistance that was recently broken to the upside.
- The DeFi sector experienced a very nice expansion in 2024
- It should continue in the same bullish dynamic in 2025
Closely monitor the $155 billion zone for DeFi, an area that could be broken to the upside faster than expected if bitcoin dominance resumes a downward path and ethereum picks up strongly.
The total market capitalization remains on interesting zones and should experience an expansion if bitcoin manages to register new highs in Q1 2025. Regardless, the ecosystem continues to develop and multiply partnerships with other players to increase democratization.