Crypto price action has been tough for the past few months, but a few green shoots are finally starting to show up.
While Bitcoin (BTC) remains in a downtrend, its price recently found support at the $17,000 level and the ping-pong price action in the $16,700-$17,300 range seems to be allowing traders to find some interesting setups seen on some altcoins.
Let’s take a quick look at some enticing patterns emerging on the weekly timeframe.
Time for Litecoin Hopium Halving?
LTC/USDT 1-day chart. Source: TradingView
As a fork from Bitcoin, Litecoin (LTC) tends to turn bullish a few months before its reward halving, as it did in 2015 and 2019.
Litecoin’s next reward halving is 237 days away, and it appears that the altcoin is enjoying a bit of pre-halving hype. Since Nov. 6, LTC has gained 58.6%, beginning to mirror the triple price action seen in previous halvings.
The Guppy Multiple Moving Averages (GMMA) indicator on the daily time frame has also turned green – something that rarely happens.
From a technical analysis perspective, LTC maintains a trend of higher lows, consolidation and bullish flag breakouts, which are then followed by further consolidation.
If LTC keeps its current market structure and continues to move along the 20-day moving average, its price could surge to the $100-$125 range before the halving.
Ether determines its own course
The ETH/BTC weekly timeframe shows some notable developments. Depending on how you look at it, a nice inverted head and shoulders could form.
ETH/BTC 1-day chart. Source: TradingView
One could also argue that the ETH/BTC weekly is showing a massive cup-and-handle pattern.
ETH/BTC weekly chart. Source: TradingView
Like Litecoin, the GMMA indicator in the weekly ETH/BTC pair has been light green since August 8, which is almost four months.
ETH/BTC weekly chart. Source: TradingView
Ether’s price action in its US Dollar and BTC pair is causing quite a stir, especially given the state of the broader market.
Despite this short-term bullish outlook, red flags such as Ethereum blockchain censorship, US Office of Foreign Assets Control compliance, ETH’s performance in its supposedly deflationary post-merge environment, and concerns about the possibility of US -Equities are being impacted and the Exchange Commission and Commodity Futures Trading Commission are changing their view of Ether as a commodity.
On-chain data tells an interesting story
A look at the on-chain data provides a bit of color. Data from Glassnode shows that Ethereum addresses with balances greater than 32 ETH, 1,000 ETH and 10,000 ETH have been in an uptrend since November 7th.
ETH address balance. Source: glass node
While the recovery is small, it is important to keep an eye on growth metrics such as new Ethereum addresses, daily active users, increases in a variety of balance cohorts, and percentage of profit holders as they could eventually mark a change in trend and sentiment.
Comparing these metrics with trading volume, price, and other technical analysis indicators can help investors get a broader view of whether opening a position in ETH is a good idea.
The MVRV Z-Score of the ETH also shows some signals. Similar to Bitcoin’s on-chain analysis, the MVRV Z-Score examines the current market cap of the asset compared to the price at which investors bought it.
The metric can indicate when an asset is over or undervalued relative to its fair value and tends to signal market highs when market capitalization is well above the realized cap.
According to the three-year MVRV Z-Score table below, the Z-Score is back in the green.
ETH MVRV Z-Score. Source: glass node
Related: Proceed with caution: Crypto warning from the US banking regulator
With the uncertainty in the market, worries surrounding tight crypto regulation, and the unresolved threats of insolvency, bankruptcy, and contagion from the FTX debacle, it’s difficult to determine if it’s time to go long ETH.
Risk-averse traders looking to pull the trigger might consider going long and short via futures. This way, if you are long-term bullish on ETH, you can build a position while hedging against short-term downside.
This newsletter was written by Big Smokey, author of The Humble Pontificator Substack and resident newsletter writer at Cointelegraph. Every Friday, Big Smokey writes market insights, trend guides, analysis and early bird research on potential emerging trends in the crypto market.
The views, thoughts, and opinions expressed herein are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain any investment advice or recommendation. Every investment and trading move involves risk and readers should do their own research when making a decision.
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