Cryptocurrency price action has been rough over the past few months, but a few green shoots are finally starting to emerge.
Although Bitcoin (BTC) remains in a downtrend, its price has recently found support at $17,000, and the ping pong price action in the $16,700-$17,300 range allows traders to make some interesting setups in several altcoins.
Let’s take a quick look at some of the attractive patterns seen on the weekly time frame.
Time for Litecoin’s Halving Hopium?
Like the Bitcoin fork, Litecoin (LTC) tends to rise a few months before the reward halving, as it did in 2015 and 2019.
Litecoin’s next reward halving is 237 days away, and it looks like the altcoin is getting a bit of hype ahead of the halving. Since November 6, LTC has gained 58.6% and is beginning to mirror the triple price action that occurred in the previous halvings.
The Guppy Multiple Moving Averages (GMMA) indicator on the daily time frame also turned green – something that rarely happens.
From a technical analysis point of view, LTC is trending higher lows, consolidating and breaking bull flags, which is followed by consolidation.
If LTC maintains its current market structure and continues to move towards the 20-day moving average, its price may see a run before halving to the $100-$125 area.
Ether sets its own course
The ETH/BTC weekly chart shows some notable developments. Depending on how one sees it, a nice inverted head and shoulders can occur.
It can also be argued that ETH/BTC is flashing a large weekly cup and handle pattern.
Like Litecoin, the GMMA indicator on the ETH/BTC weekly pair has been bright green since August 8, nearly four months ago.
The price action on Ether’s USD-BTC pair is raising eyebrows, especially given the state of the broader market.
Despite the short-term bullish forecast, concerns about Ethereum blockchain censorship, US Office of Foreign Assets Control compliance, ETH’s performance in a supposedly post-deflationary Consolidation environment, and the possibility of US Securities could affect ETH’s price. and the Exchange Commission and Commodity Futures Trading Commission are changing their views on Ether being a commodity.
The information about the chain tells an interesting tale
Looking at the data on the chain gives some color. Data from Glassnode shows that since November 7th, Ethereum addresses with balances above 32 ETH, 1,000 ETH, and 10,000 ETH are trending upwards.
Although the rebound is small, it is important to pay attention to growth indicators such as new Ethereum addresses, daily active users, increases in different balance cohorts, and percentage of profit holders, as they may eventually indicate a change in trend and sentiment.
Comparing these metrics to trading volume, price, and other technical analysis indicators can help investors get a more comprehensive view of whether it is a good idea to open a position in ETH.
ETH’s MVRV Z-Score is also flashing a few signals. Similar to Bitcoin’s chain analysis, the MVRV Z-Score examines an asset’s current market capitalization against the price at which investors purchased it.
The metric can suggest whether an asset is overvalued or undervalued relative to its fair value, and tends to indicate market tops when the market cap is significantly higher than the realized threshold.
According to the three-year MVRV Z-Score chart below, the Z-Score is back in the green zone.
Related: Caution: US banking regulator’s cryptocurrency warning
Given the uncertainty in the market, concerns about tighter crypto regulation, and the risks of contagion from an unresolved insolvency, bankruptcy, and FTX crisis, it’s difficult to determine whether it’s time to go long on ETH.
Risk-averse traders can consider going long and short through futures. This way, if one sees a long-term bullish trend in ETH, they can build a position while hedging against short-term downside.
This newsletter was written by author Big Smokey Humble Pontificator Substack and resident newsletter writer at Cointelegraph. Every Friday, Big Smokey writes market insights, how-tos, analysis and early research on potential emerging trends in the cryptocurrency market.
The views, opinions and opinions expressed herein are solely those of the authors and do not reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. Every investment and trading action involves risk and readers should do their own research before making a decision.