ETHBTC: Be Patient (for more gains)
Updated
• A discussion with tradingview.com/u/d-MR96nBa/ spurred me to think a bit deeper about ETHBTC.
• Fundamentally, Ethereum is fantastic tech, and it is eventual that ETH will flip BTC. The potential is there, but the real questions are if, when and how? And these are questions which TA can provide better answers.
• ETHBTC has been concurrently forming a cup&handle and a bullish pennant. Given the timing of this bullrun, Elliot Wave theory, the bullish pennant and ETH’s personality, it is eventual that she will break out and form a new ATH towards the end of this bullrun. The real question is if she will breakout sooner or later?
• This is an important question as swinging to ETH too early will incur huge opportunity costs, especially if one, like me, has been observing BTC.D and is riding on the alt season wave (very importantly this is a Wave C). Swinging to ETH late will also incur opportunity costs, but much less so as ETH tends to correct for a few days after a breakout.
• What then are the primary reasons for ETHBTC breaking out of the bullish pennant within these few days? That is primarily the fact that ETHBTC has been forming a double bottom within the pennant.
• However, if we were to apply Elliot Wave theory, we note that there are generally 2 intermediate higher lows in Wave 5. *Assuming* we saw the start of Wave 5 on 21 Jun’21, there should be one more higher low after the one on 11 Oct’21. This is not a double bottom; it is the much better triple bottom.
• If we were to examine previous ETHBTC peaks, we note that there are 5-7 robust and green candles prior to the peaks (5, Jun’17; 5, Jan’18; 7, May’21). We have had 4 weak green weekly candles since 11 Oct’21. *If* history is any indication, if ETHBTC were indeed peaking, then this would be a rather pathetic peak for ETH.
• If we were to look at ETHBTC’s parabolic move in Apr-May’21, we see that it is heralded by a crossing of the 8W SMA, 21W EMA and 20W SMA, with the lines coming out of the cross in this order (an order which is commonly found in the parabolic moves of most coins). The lines crossed at the 0.786 Fib level of the previous wave, as calculated from top to bottom. *If* history is any indication, ETHBTC still has some way to go as the lines have not crossed, and a similar 0.786 Fib level of 0.07655 has not yet been reached. The crossing of the current trendline (linking the peaks on Jan’18 and May’21) and the 0.786 Fib level is around 13 Dec’21.
• If we were to examine the previous bullrun, the RSI of the 2nd peak is in-between the 0.5 and 0.618 Fib level of the 1st peak. *If* history is any indication, ETHBTC’s RSI has still some way to go. Coincidentally, this is also the mid-channel of the ascending parallel channel that her RSI has been in since Sep’21. Also coincidentally, if we were to project RSI levels, *assuming* ETHBTC's weekly RSI grows at a constant pace, then this level will be reached after 13 Dec'21.
• Using the same Fib levels, *if* history is any indication, ETHBTC will peak in between 0.128 (2.618 Fib) and 0.155 (3.272 Fib).
- TLDR as follows: (1) There is a confluence of factors that suggests that ETHBTC might not break out so early; and (2) similarly, there is a confluence of factors that suggests that ETHBTC might start breaking out around 13 Dec’21.
- Assumptions: *we started Wave 5 on 21 Jun’21; *ETHBTC’s parabolic moves are indeed parabolic; *ETHBTC’s parabolic moves are similar to other coins and are preceded by the crossing of the specified lines; *the crossing of these lines happen at 0.786 of the previous Wave; *ETHBTC will peak when her weekly RSI is in between 66.4%-70.3%.
- This thesis is invalidated if **the bullish pennant fails; or ** ETHBTC breaks out above the bullish pennant and closes a weekly candle above the pennant before 13 Dec’21.
- Watch: ***Weekly RSI’s anticipated peak in between 66.4%-70.3%; and ***ETHBTC’s anticipated peak in between 0.128 and 0.155.
• Fundamentally, Ethereum is fantastic tech, and it is eventual that ETH will flip BTC. The potential is there, but the real questions are if, when and how? And these are questions which TA can provide better answers.
• ETHBTC has been concurrently forming a cup&handle and a bullish pennant. Given the timing of this bullrun, Elliot Wave theory, the bullish pennant and ETH’s personality, it is eventual that she will break out and form a new ATH towards the end of this bullrun. The real question is if she will breakout sooner or later?
• This is an important question as swinging to ETH too early will incur huge opportunity costs, especially if one, like me, has been observing BTC.D and is riding on the alt season wave (very importantly this is a Wave C). Swinging to ETH late will also incur opportunity costs, but much less so as ETH tends to correct for a few days after a breakout.
• What then are the primary reasons for ETHBTC breaking out of the bullish pennant within these few days? That is primarily the fact that ETHBTC has been forming a double bottom within the pennant.
• However, if we were to apply Elliot Wave theory, we note that there are generally 2 intermediate higher lows in Wave 5. *Assuming* we saw the start of Wave 5 on 21 Jun’21, there should be one more higher low after the one on 11 Oct’21. This is not a double bottom; it is the much better triple bottom.
• If we were to examine previous ETHBTC peaks, we note that there are 5-7 robust and green candles prior to the peaks (5, Jun’17; 5, Jan’18; 7, May’21). We have had 4 weak green weekly candles since 11 Oct’21. *If* history is any indication, if ETHBTC were indeed peaking, then this would be a rather pathetic peak for ETH.
• If we were to look at ETHBTC’s parabolic move in Apr-May’21, we see that it is heralded by a crossing of the 8W SMA, 21W EMA and 20W SMA, with the lines coming out of the cross in this order (an order which is commonly found in the parabolic moves of most coins). The lines crossed at the 0.786 Fib level of the previous wave, as calculated from top to bottom. *If* history is any indication, ETHBTC still has some way to go as the lines have not crossed, and a similar 0.786 Fib level of 0.07655 has not yet been reached. The crossing of the current trendline (linking the peaks on Jan’18 and May’21) and the 0.786 Fib level is around 13 Dec’21.
• If we were to examine the previous bullrun, the RSI of the 2nd peak is in-between the 0.5 and 0.618 Fib level of the 1st peak. *If* history is any indication, ETHBTC’s RSI has still some way to go. Coincidentally, this is also the mid-channel of the ascending parallel channel that her RSI has been in since Sep’21. Also coincidentally, if we were to project RSI levels, *assuming* ETHBTC's weekly RSI grows at a constant pace, then this level will be reached after 13 Dec'21.
• Using the same Fib levels, *if* history is any indication, ETHBTC will peak in between 0.128 (2.618 Fib) and 0.155 (3.272 Fib).
- TLDR as follows: (1) There is a confluence of factors that suggests that ETHBTC might not break out so early; and (2) similarly, there is a confluence of factors that suggests that ETHBTC might start breaking out around 13 Dec’21.
- Assumptions: *we started Wave 5 on 21 Jun’21; *ETHBTC’s parabolic moves are indeed parabolic; *ETHBTC’s parabolic moves are similar to other coins and are preceded by the crossing of the specified lines; *the crossing of these lines happen at 0.786 of the previous Wave; *ETHBTC will peak when her weekly RSI is in between 66.4%-70.3%.
- This thesis is invalidated if **the bullish pennant fails; or ** ETHBTC breaks out above the bullish pennant and closes a weekly candle above the pennant before 13 Dec’21.
- Watch: ***Weekly RSI’s anticipated peak in between 66.4%-70.3%; and ***ETHBTC’s anticipated peak in between 0.128 and 0.155.
Note
BTCUSD just pumped and ETHBTC dropped. That's great. What will probably happen in the short-term future is ETHBTC's consolidation, forming the 2nd higher low of Wave 5, a triple bottom within the bullish pennant, and then blast off nearer 13 Dec'21.
For alts, we will also see BTC.D's consolidation, and the swing from NFTs to ETH-related alts. LRCUSD will pump. ENJUSDT will pump too, but less so. Watch DENTUSDT; with the reopening of US borders and hence changing *perceptions* of DENT's potential, DENTUSDT will pump as long as her daily MACD remains positive for one more week.
Note
• ETHBTC has been trending as per forecasted since early Nov.• All other trades matter as much as they are means to add to my ETH bag.
• ETHBTC appears to be meeting resistance at the intersection between Fib level and trendline.
• ETHBTC may power through, but I would not mind if it takes a bit more time.
Note
• It was educational to read through my thoughts on 8 Nov'21 to see what I got correct and what I got wrong.• The crypto space is young, and forecasting tools that have been validated against the US Stock Market may not apply well without adaptations.
• Be deterministic at own risk!
Note
• It is tempting to make premature judgements.• Let's avoid premature celebrations, and wait till the monthly close.
Note
• That was a good monthly close.• Let's see if ETHBTC can break through the 0.0824 resistance, and confirm it as support by the end of this week.
• Thereafter, let's wait for the weekly MAs to cross (approximately in the week of 13 Dec'21).
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