As Bitcoin has consolidated in the 50k range over the last couple of months, the money has begun to flow into Ethereum which has had an explosive run going up to $3600 from its local bottom at $1500. It has continued its parabolic ascent although a very important point to make is that this could just be the start for Ethereum, and here is why.
ETH vs BTC
The continuous gains Ethereum made in January and February were very impressive indeed, hitting new ATHs every few days as Ethereum was seeking to discover its value. However, we can see during this run, Bitcoin largely outperformed Ethereum as shown in the chart, as of course, this was during the time Tesla announced their purchase of Bitcoin which lead Bitcoin to go on another parabolic run. Therefore, we can conclude that Ethereum's run was largely down to Bitcoin's growth.
Although, we can see from the chart that Ethereum has been in this ascending channel against Bitcoin, on average outperforming it since September 2019. However, we are yet to see Ethereum going parabolic against Bitcoin as it previously has done before.
And this was the main point I wanted to bring up. Ethereum is yet to go parabolic against Bitcoin. At the moment, Ethereum is set to breakout of the ascending channel, and if the weekly closes comfortably above 0.055 BTC, then, along with a stagnant Bitcoin, there is a very high possibility Ethereum continues to approach previous levels of BTC valuations, and this would likely be reflected in the USD value.
ETHUSD 1H
In terms of its USD valuation, Ethereum seems as though it is temporarily cooling off with the immediate resistance now being at $3600. The chart pattern on the 1H suggests significant price action incoming for Ethereum in either direction.
We can see Ethereum is forming an ascending triangle that is getting close to the climax. Using the swing high and low, a breakdown from the previous swing low at $3425 would lead to a price target of $3000 or even a retest of the resistance of the previous ascending channel at $2900. The 20D EMA currently lies between these two levels as well, so there is very strong support there as well. That would be the buying zone.
If Ethereum breaks out from its previous swing high of $3614, using the swing low and high of the triangle once again, the price target would lead us to a price target of $4150. Using the fib levels formed through the Fib Extension levels would lead us to a price target region of $4100 and $4300. Again, this may not be 100% accurate as Ethereum is in price discovery mode, it could under or overshoot.
The Big Picture
Regardless of the micro-movements, on the macro side of things, Ethereum is looking very bullish and will most likely go near the 5k target during this month or the next. A bounce off the 20D EMA would confirm the movement of ETH going parabolic, so even if it does, there is no need to stress. With ETH/BTC breaking out of the ascending channel, we may also expect a retest of the previous resistance line on the next weekly candle as well. The MACD has been bullish for quite some time, however, over the last couple of days, the bars of the MACD have begun to slope downwards which also suggests some downward price pressure. In addition to that, with the RSI having stayed in the oversold region for quite a few days now, I think the most likely outcome of this ascending triangle is the breakdown towards the 20D EMA and even the previous ascending channel resistance.
I expect June to be yet another good month for Ethereum and so I will continue to hold the majority of my portfolio in Ethereum. $10k Ethereum will come sooner or later, whatever the weather.
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