Ethereum and Litecoin take a step forward as Bitcoin price seeks stronger footing

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Crypto price action has been tough over the past few 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 price action ping-pong in the $16,700-$17,300 range appears allow traders to pursue interesting setups in a few altcoins.

Let’s take a look at some attractive patterns that appear on the weekly time frame.

Time for Litecoins to Halve Hopium? LTC/USDT 1-day chart. Source: Trading View

As a fork of Bitcoin, Litecoin (LTC) tends to go bullish several months before its reward is halved, as was the case in 2015 and 2019.

The next Litecoins reward halving is 237 days away, and it looks like the altcoin is getting a bit of hype ahead of the halving. Since Nov. 6, LTC has gained 58.6% and is beginning to mirror the triple price action that occurred during previous halvings.

The Guppy Multiple Moving Averages (GMMA) indicator on the daily timeframe also turned green, which rarely happens.

From a technical analysis perspective, LTC maintains a pattern 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 follow the 20-day moving average, its price could see a halving to the $100-$125 area.

The ether makes its own way

The ETH/BTC weekly timeframe shows some notable developments. Depending on how you look at it, there could be a nice reverse head and shoulders formation.

ETH/BTC 1-day chart. Source: Trading View

One could also argue that the ETH/BTC weekly is showing a massive cup and handle pattern.

ETH/BTC weekly chart. Source: Trading View

Like Litecoin, the GMMA indicator for the weekly ETH/BTC pair has been bright green since August 8, nearly four months.

ETH/BTC weekly chart. Source: Trading View

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, the price of ETH could be affected by red flags such as Ethereum blockchain censorship, US Office of Foreign Assets Control compliance, the performance of ETH in its supposedly deflationary post-merger environment and concerns about the possibility of US Securities. and Exchange Commission and Commodity Futures Trading Commission changing their view on ether as a commodity.

On-chain data tells an interesting story

Looking at the on-chain data provides some color. Data from Glassnode shows that since November 7, Ethereum addresses with balances above 32 ETH, 1,000 ETH, and 10,000 ETH are on an upward trend.

ETH Address Balances. Source: glassnode

Although the rebound is weak, it is important to keep an eye on growth metrics such as new Ethereum addresses, daily active users, increases in various equilibrium cohorts, and percentage of profit holders, as they could possibly mark a change in trend and sentiment.

Comparing these metrics with trading volumes, prices, and other technical analysis indicators can help investors get a more complete view of whether opening a position in ETH is a good move. idea.

ETHs MVRV Z-Score is also flashing a few signals. Similar to the Bitcoin on-chain analysis, the MVRV Z-Score examines the current market capitalization of the asset relative to the price at which investors bought it.

The metric can suggest when an asset is overvalued or undervalued relative to its fair value, and it tends to signal market highs when market capitalization is significantly higher than realized capitalization.

According to the three-year MVRV Z-Score chart below, the Z-Score is back in the green zone.

Z-score ETH MVRV. Source: glassnode

Related: Approach With Caution: Crypto Warning From US Banking Regulators

Given the market uncertainty, concerns over tough crypto regulation, and unresolved threats of insolvency, bankruptcy, and contagion from the FTX debacle, it’s hard to say if it’s time to go long. on ETH.

Risk-averse traders looking to pull the trigger might consider taking both long and short futures positions. This way, if one is long-term bullish on ETH, he can build a position while protecting against short-term declines.

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, actionable trend tips, analysis, and early research on potential emerging trends in the crypto market.

The views, thoughts and opinions expressed herein are the sole authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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