Ethereum: Historical Playbook Points To $3,800 In Coming Months
August 09 2023 - 3:55AM
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Renowned analyst Josh Olszewicz has shared some compelling insights
on Ethereum’s price trajectory. Drawing parallels from historical
patterns, Olszewicz’s analysis suggests that Ethereum might be
gearing up for a significant rally in the coming months. Historical
Pattern: Ethereum Forms Ascending Triangle Olszewicz starts by
highlighting Ethereum’s current price pattern, jokingly stating,
“Ethereum: ascending triangle 450 million years in the making w/fib
extensions to $3k.” This ascending triangle, characterized by a
flat top and rising bottom, has been forming since May 2022, and if
history is any guide, it could be a bullish sign for Ethereum.
Descending volume, another feature of this pattern, further
strengthens the bullish bias. However, Olszewicz cautions that the
“bias remains bullish until price breaks below diagonal support.”
He also points out the psychological resistance at $2,000, noting
it as an “extremely obvious signal that it’s go time, which should
help the breakout.” Related Reading: Valkyrie Unveils
Double-Barreled Approach To Launch An Ethereum ETF Alongside A
Bitcoin ETF To bolster his analysis, Olszewicz draws parallels from
Bitcoin’s past. He recalls, “take BTC in 2015/2016 [the price
formed an ascending triangle for 210 days with descending volume]
and BTC in 2018/2019 [ascending triangle for 130 days with
descending volume] as examples.” In both instances, Bitcoin surged
towards the Fibonacci extension levels post the breakout. Ethereum
itself isn’t a stranger to such patterns. Olszewicz cites, “ETH has
also had previous examples in 2017 (bullish continuation) and 2019
(bullish reversal).” Each ascending triangle pattern lasted 180
days. Both times ETH surged towards the 2.618 Fibonacci extension
level. Drawing from these historical patterns, Olszewicz suggests
that Ethereum is currently holding the potential to overshoot the
1.618 Fibonacci level and possibly reach the 2.618 level, which
translates to a price of $3,800. However, he wisely advises, “but
don’t get out the imaginary profit calculator just yet, let’s break
$2k first.” ETH vs. BTC: Which One Is The Better Trade? While
Ethereum’s potential rally is intriguing, Olszewicz also delves
into its performance relative to Bitcoin. He observes that Ethereum
has underperformed Bitcoin year-to-date, attributing this to the
ETF narrative and Bitcoin’s dominance as hard money. He speculates,
“the better trade may continue to be BTC/USD, especially with
initial spot ETF inflows favoring BTC.” Related Reading: Why Is
Bitcoin And Crypto Surging Today? However, if the ETH/BTC pair can
break and sustain new highs, it might hint at a runaway trade for
Ethereum. But Olszewicz remains skeptical, stating it’s “unlikely
based on ETF flows.” Olszewicz also doesn’t shy away from
discussing potential bearish scenarios. He’s closely watching
certain bearish ETH/BTC levels, including the current local low at
0.050 and the previous inverse head and shoulders neckline at
0.039. For Bitcoin, he suggests a potential move to $42,000,
provided it maintains certain bullish conditions. He notes, “as
long as we can maintain prices above the midline of the PF &
stay in the cloud, we have a decent shot at reaching $42k before
halving.” Wrapping up his analysis, Olszewicz envisions a dream
trade where Bitcoin breaks bullish first, possibly due to
technicals or a spot ETF approval. In this scenario, Ethereum
breaks $2,000 but lags behind Bitcoin, leading to ETH/BTC getting
“crushed, allowing for an eventual profit taking rotation from
Bitcoin to Ethereum”. However, he concludes with a word of caution:
“without inflows, we ain’t movin.” At press time, ETH traded at
$1,860. Featured image from iStock, chart from TradingView.com
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