ETH recently broke below its historical support of 0.025 BTC and printed a fresh all-time low of 0.020138 BTC on Binance on July 16. With no support to keep its head above water, bears warn that the ethereum price could plunge indefinitely.
Nevertheless, two contrarian crypto traders believe that ETH/BTC’s outlook is far from bleak. In fact, they predict that the ethereum price could be on the verge of a major pump.
Technical analysis is the study of historical price action. History tends –but does not always – repeat itself, which is why fractals appear in the charts of many assets.
Ethereum has historically followed a relatively predictable trajectory against bitcoin. That’s according to a pseudonymous Twitter account named Panama B. On July 25, the analyst demonstrated how the ETH/BTC market followed the exact same pattern during its two previous cycles.
Looking at the chart, the resemblance between the two market cycles is undeniable. It appears that the ETH/BTC pair follows five distinct stages:
If you look at the chart closely, you will see the first market cycle on the left-hand side of the screen. This appears to be the fractal or the mini version of the cycle that occupies most of the chart.
What’s interesting about these fractals is that ethereum appears to be at the final stages of the second market cycle now. In other words, stage one – the test pump of a new cycle – should be on the horizon.
Fellow trader Pato also argues that fractals present a bullish outlook for the ethereum price. However, according to their analysis, each cycle has just two distinct stages: distribution and markup.
In the trader’s tweet, it is easy to identify patterns that keep repeating. At the leftmost side of the screen is the first market cycle. It involves a period of distribution which is highlighted by the blue rectangle. It was then followed by a mega pump (yellow rectangle) which pushed ethereum by over 1,200 percent from the bottom of the distribution.
The second market cycle followed the exact same pattern. Ethereum had a long markdown period (blue rectangle) which was succeeded by a massive rally of close to 1,200 percent (yellow rectangle).
Now, it appears that the cryptocurrency is in the distribution phase of the third market cycle. Just like Panama B’s fractals, it seems that ethereum may be very close to a massive pump.
Disclaimer: This article is intended for informational purposes only and should not be taken as investment advice.
Last modified (UTC): July 26, 2019 20:14