Ethereum and Litecoin make a move as the Bitcoin price searches for firmer footing
Crypto price action has been rough in recent months, but a few green shoots are finally starting to emerge.
While Bitcoin (BTC) remains in a downtrend, the price has recently found support at the $17,000 level, and ping-pong price action in the $16,700-$17,300 range appears to allow traders to pursue some interesting setups in a few altcoins.
Let’s take a quick look at some tempting patterns emerging on the weekly time frame.
Time for Litecoin’s Halving Hopium?
As a fork of Bitcoin, Litecoin (LTC) tends to become bullish several months before the reward halving takes place, as was the case in 2015 and 2019.
Litecoin’s next reward halving is 237 days away, and it appears the altcoin is undergoing a bit of pre-halving hype. Since November 6th, LTC is up 58.6% and it is starting to mirror the triple price action that happened in previous halvings.
The Guppy Multiple Moving Averages (GMMA) indicator on the daily timeframe has also turned green – something that rarely happens.
From a technical analysis point of view, LTC maintains a trend of higher lows, consolidation and bull flag breakouts, which are then followed by further consolidation.
If LTC maintains its current market structure and continues to cycle along the 20-day moving average, the price could see a pre-halving up to the $100-$125 range.
Ether plots its own course
The weekly timeframe for ETH/BTC shows some notable developments. Depending on how you look at it, a nice inverted head and shoulders can form.
One could also argue that the weekly ETH/BTC is showing a massive cup-and-handle pattern.
Like Litecoin, the GMMA indicator in the weekly ETH/BTC pair has been light green since August 8, which is almost four months.
Ether’s price action in its US dollar and BTC pair is raising eyebrows, especially given the state of the broader market.
Despite this short-term bullish outlook, ETH’s price could be affected by red flags such as Ethereum blockchain censorship, US Office of Foreign Assets Control compliance, ETH’s performance in its presumed deflationary post-merger environment, and concerns over the possibility of US securities. and the Exchange Commission and the Commodity Futures Trading Commission are changing their perspective on Ether being a commodity.
On-chain data tells an interesting story
Looking at data on the chain adds some color. Data from Glassnode shows that since November 7, Ethereum addresses with balances greater than 32 ETH, 1,000 ETH and 10,000 ETH have been in an upward trend.
Although the decline is small, it is important to keep an eye on growth metrics such as new Ethereum addresses, daily active users, increases in a number of balance cohorts, and the percentage of holders in profit because they may ultimately mark a change in trend and sentiment.
Comparing these metrics against trading volume, price, and other technical analysis indicators can help investors get a more comprehensive view of whether opening a position in ETH is a good idea.
ETH’s MVRV Z-Score is also flashing a few signals. Similar to Bitcoin on-chain analysis, the MVRV Z-Score examines the current market value of the asset versus the price at which investors purchased it.
The calculation can indicate when an asset is overvalued or undervalued relative to fair value, and it tends to signal market tops when the market value is significantly higher than the realized value.
According to the three-year MVRV Z-Score chart below, the Z-Score is back in the green zone.
Related: Approach with caution: US banking regulator’s crypto warning
Considering the uncertainty in the market, concerns related to strict crypto regulation and the unresolved threats of insolvency, bankruptcy and contagion from the FTX debacle, it is difficult to decide whether it is time to go long on ETH.
Risk-averse traders looking to pull the trigger can consider going spot long and short through futures. That way, if one is long-term bullish on ETH, they can build a position while hedging against short-term downside.
This newsletter was written by Big Smokey, the author of The humble pontificator Substack and resident newsletter writer at Cointelegraph. Every Friday, Big Smokey writes market insights, trends, analysis and early research on potential new trends within the crypto market.
The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. All investment and trading moves involve risk and readers should conduct their own research when making a decision.
