Cryptocurrency price action has been disastrous for traders in recent months, but some green shoots are finally starting to emerge.
While Bitcoin (BTC) remains in a downtrend, its price has recently found support at the $17,000 level, and the erratic price action in the $16,700 – $17,300 range seems to be allowing traders to chase some interesting setups in some altcoins.
Let’s take a quick look at some attractive patterns appearing on the weekly time frame.
Is the Litecoin halving hopium coming?
As a fork of Bitcoin, Litecoin (LTC) tends to turn bullish several months before its block reward reduction occurs, as it did in 2015 and 2019.
There are 237 days to go until the next Litecoin halving, and it seems that the altcoin is experiencing a bit of hype leading up to the event. Since November 6, LTC has gained 58.6%, and it is beginning to reflect the triple price action that occurred in previous halvings.
The Guppy Multiple Moving Averages (GMMA) on the daily time frame has also turned green, something that rarely happens.
From a technical analysis point of view, LTC is in a trend of higher lows, consolidation and bull flag breakouts, followed by further consolidation.
If LTC maintains its current market structure and continues through the 20-day SMA, its price could see a pre-halving run to the $100-$125 area.
Ether charts its own course
The weekly time frame for the ETH/BTC pair shows some notable developments. Depending on how it looks, it could be forming a nice inverted head and shoulders configuration.
It could also be argued that the weekly frame for the ETH/BTC pair is showing a massive cup-and-handle pattern.
Like Litecoin, the GMMA indicator on the weekly frame for the ETH/BTC pair has been bright green since August 8, which is almost four months.
Ether’s price action on its US dollar pair and BTC raises eyebrows, especially given the state of the market in general.
Despite this short-term bullish outlook, the ETH price could be affected by red flags such as Ethereum blockchain censorship, US Office of Foreign Assets Control compliance, ETH performance on its supposedly deflationary environment after The Merge and concerns about the US Securities and Exchange Commission and Commodity Commission changing their view of Ether as a commodity.
On-chain data tells an interesting story
On-chain data brings 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 on a bullish trend.
Although the rally is small, it’s important to keep an eye on growth metrics like new Ethereum addresses, daily active users, increases in a variety of balance cohorts, and percentage of holders in profits because they could eventually mark a turnaround. and feeling.
Contrasting these metrics with trading volumes, price, and other technical analysis indicators can help investors get a more complete picture of whether taking a position in ETH is a good idea.
ETH’s MVRV Z-Score is also giving off some signals. Like the on-chain analysis of Bitcoin, the MVRV Z-Score examines the current market capitalization of the asset against the price at which investors bought it.
The metric can suggest when an asset is overvalued or undervalued relative to its fair value, and tends to signal market highs when market capitalization is significantly higher than realized capitalization.
Based on the three-year MVRV Z-score graph below, the Z-score has returned to the green zone.
Given the uncertainty in the market, concerns related to strict cryptocurrency regulation, and unresolved threats of insolvency, bankruptcy, and contagion from the FTX debacle, it is difficult to determine if it is time to go long ETH.
Risk-averse traders looking to pull the trigger might consider going long cash and shorting via futures. This way, if one is long-term bullish on ETH, they can build a position while hedging against short-term dips.
This newsletter was written by Big Smokey, the author of The Humble Pontificator Substack and resident newsletter author at Cointelegraph. Every Friday, Big Smokey writes market insights, trends, analysis, and research on potential emerging trends in the cryptocurrency 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 investment advice or recommendations. All investments and trades carry risks, so readers should do their own research when making a decision.
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