Crypto Analysis | ETHs bullish potential
Good day Hiveians!
Join me in analyzing the crypto markets!
Ethereum as one of the top altcoins is still lagging relatively to bitcoin.
Nevertheless, its outlook is very bullish as we have seen before. In this post I want to look at the ETH/BTC pairing and examine the potential outlook for ETH.
Looking at the chart it becomes clear that the pair is stuck in a horizontal triangle, indicating price uncertainty. Moreover, price of ETH relatively to BTC has been bearish for most of the time; the only bull phase was from January to June of 2017 - very short with only half a year. Since then repeating patterns (marked in red ovals) have dominated the price movement. The overall trend is definitely bearish and this sentiment was almost cemented when price broke out to the bottom of the triangle just some days ago.
In my experience these sort of triangles never run to the end. Instead a break out (either way) clearly happens before that. With less than a year before the space "runs out", a decision is coming up.
The downward breakout would be the norm if this pattern were to continue. However, a bullish scenario is in my opinion more likely. This is because - as we have often pointed out - the market works in cycles. After almost 4 years of a bear phase this pairing is set up for another bull phase.
How would it look like?
If we look at the bull phase of 2017, it happened quickly (6 months) and was marked by a 1000% increase in price for ETH. This would give us something like this (notice that the time span is roughly double, as this cycle is prolongued):
Looking at the ETH/USD chart would give us an outlook like this:
Finally, lets have a look at BTC/USD.The first date range marks the time when ETH/BTC was in a bull phase. The second date range is the proposed second bull phase for ETH/BTC. A rough outlook for the price of BTC/USD is also given (notice again the similarities to the previous cycle).
All in all, the cycles are set up to repeat again. Why this happens almost like clockwork is anyone's guess. But I strongly think that this is linked to group/herd mentality and the concept of self fulfilling prophesies. In other words, if many people think that something should/could happen, it most likely will.
As a general reminder: Please keep in mind that none of this is official investment advice! Crypto trading entails a great deal of risk; never spend money that you can't afford to lose!
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