The flippening (Ethereum dominance perdiction)
If we look at the ETHXBT chart from Kraken (okay volume, lots of history), we can see that that the ETH BTC ratio has been forming a triangle on the daily/weekly charts. I have drawn two triangles, the smaller one connects the 6 hour closes, the longer one connects the daily highs and lows. The analysis of ETHBTC bittrex charts also has the same timeframe on the weekly charts. Generally triangles break 2/3 - 3/4 to completion, since there two I made two time measures under. Creating a handwaving break out period at 3/4 completion of the smaller triangle, and halfway between the 2/3 and 3/4 measure of the larger triangle and giving an accurate measure (vertical green line), that could place our ETHBTC around the 0.23 zone by October 2018, which also is the area of the 1.68 area of the initial breakout.
The first time that the weekly stoch rsi hung out in the oversold region for roughly 260 days in a consolidation period in May 2016. The second time was July 2017 for 120 days or so. So by the end of April we should hit the bottom of the stoch rsi and stay in the oversold region till August. The weekly macd looks bearish for the next few weeks, but if the macd falls lower the next potential long crossover signal could be strongly under zero. Now looking at the monthly stochastic rsi, we are crossing at the bottom for the first time, entering new territory.
The 49 day moving average seems to be a decent indicator of the situation as well.
So my current perdiction is that we enter the first smaller white box at the bottom between April and November, possibly tagging the lower trendline. While that happens the weekly stoch rsi regain strength and the weekly macd give a bullish crossover under zero. At some point there we will see the 49 day moving average crossover and stay on the underside. This should begin the move to the top target region around the 1.68 extension.
Things that would invalidate this analysis:
1. Breaking of the bottom trendline by a weekly close under 5%
2. Failure to break the top by the start of July 2019
3. Double peak formation at the previous ATH on the weekly
4. Failure to achieve the target zone by February 2020 (125% of the smaller triangle timeline).
Discussion is welcome, please consider the is pure speculation.
The first time that the weekly stoch rsi hung out in the oversold region for roughly 260 days in a consolidation period in May 2016. The second time was July 2017 for 120 days or so. So by the end of April we should hit the bottom of the stoch rsi and stay in the oversold region till August. The weekly macd looks bearish for the next few weeks, but if the macd falls lower the next potential long crossover signal could be strongly under zero. Now looking at the monthly stochastic rsi, we are crossing at the bottom for the first time, entering new territory.
The 49 day moving average seems to be a decent indicator of the situation as well.
So my current perdiction is that we enter the first smaller white box at the bottom between April and November, possibly tagging the lower trendline. While that happens the weekly stoch rsi regain strength and the weekly macd give a bullish crossover under zero. At some point there we will see the 49 day moving average crossover and stay on the underside. This should begin the move to the top target region around the 1.68 extension.
Things that would invalidate this analysis:
1. Breaking of the bottom trendline by a weekly close under 5%
2. Failure to break the top by the start of July 2019
3. Double peak formation at the previous ATH on the weekly
4. Failure to achieve the target zone by February 2020 (125% of the smaller triangle timeline).
Discussion is welcome, please consider the is pure speculation.
Comment:
Entering the target zone faster than anticipated, now we are penetrating the top of the box. I have laid out 3 levels at which I will initiate longs (green lines). The lowest level is where ETHBTC made peaks back in March and June of 2016. The middle level is at about a 25% retracement of the ath where there seems to be some resistance/ support flipping. The highest buying level is the top of the white box which is defined by local peaks in March, May, and November 2017. It is likely that the lowest buying level may not get hit because it is under the longest term trend, so I will place my buy orders just above that point. I will be using my Holy Grail V3 indicator to roughly time the bottom. My first buy orders will be at the lowest levels. When price penetrates the pink Holy Grail line I will then start placing buy orders at the closest level, or add to my position from the bottom or just to open one if the bottom isn't hit. Assuming the triangle breakout will be 75% to the apex that places the breakout around October to December where there may be some temporary resistance
Comment:
Hey everyone, I'm happy to say that everything looks on track! At this point in time we are testing the bottom of this flag. Should the ratio drop well under 0.036 this whole thing may be invalidated, otherwise we should start seeing some upward movement in ETH/BTC. I opened a short position where that white line is and today I am closing my shorts.
Comment:
The area between the dotted white vertical lines in the plot above is roughly where I expect the ratio to exit the top of the flag, in a 'breakout'. Interestingly this may be where we saw BTC make a peak last year, in December or so