The Ethereum/Bitcoin (ETH/BTC) pair looks bullish from a long-term perspective. However, it might take the pair a month or so before it can launch a bull run. The timing appears to be in line with Bitcoin’s expected correction after it hit major resistance of $9,600. So for now, we’ll just play the bounce.
ETH/BTC is in oversold territory on the daily chart. On top of that, the pair is about to touch key support of 0.055. The thinning supply combined with increased demand is a good recipe for a bounce.
Furthermore, a quick look at the lower time frames shows that the pair is gathering bullish steam. The pair has generated a series of higher highs and higher lows in the 4-hour RSI. Buying has intensified as seen in volume surges. On top of that, a long bullish divergence can be spotted on the 1-hour chart. These indicate that the pair is preparing for a rally.
The strategy is to buy as close to 0.055 support as possible. If the market stays on top of the support, a rally to our initial target of 0.065 is very likely. Take that out and we can expect the market to push this rally to as high as 0.74.
The process may take less than a month.
Daily Chart of Ethereum/Bitcoin on Bittrex
As of this writing, the ETH/BTC pair is trading at 0.0565 on Bittrex.
Summary of Strategy
Buy: As close to 0.055 as possible.
Target: 0.065 first and then 0.074.
Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.