November 30, 2021
Cryptocurrencies: Daily Update
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After back-to-back weeks of the crypto market selling off, Ethereum has begun to turn around and has had a strong +17% recovery from Sunday lows. If you look back to this past week’s CryptoPulse Weekly report, you’ll remember that we recognized ETH as the first large-cap cryptocurrency to regain its 50-day Moving Average, a key support level.
Bitcoin has also bounced from lows and recovered +8% so far since Sunday. In comparison to Ethereum, Bitcoin’s recovery has been slow and steady to start the week. Interestingly, when looking at a ratio between the two largest cryptocurrencies you’ll notice that ETH/BTC is at its highest level of outperformance since May.
Personally, I’m anticipating a bit of a reversal on this ratio, as it shows ETH having been overbought on both price and momentum according to RealMotion. However, there is the possibility that this ratio could go into discovery and we see Ethereum shoot past Bitcoin on a relative basis.
As I’m writing this, ETH/BTC has broken through the 7.8% ratio resistance level and looks to be continuing into potential discovery on the tail end of a cup and handle pattern.
With low volume on distribution days and a major spike in volume today as the ratio goes into discovery, this pattern could see the ETH/BTC ratio exceed the 2021 high of 8.24%.
Lots of traders love to trade the ETH/BTC pair (available on both Kraken and Coinbase Pro). Trading the ratio allows you to keep your capital completely exposed in crypto, and lets you attempt to capture profits based on relative outperformance when most of the market is moving together.
Keep an eye on this ratio throughout the coming weeks, especially throughout the remainder of this week as we wait to see if ETH will continue to lead the crypto market recovery.
Coins to Watch: Right now I really like Chainlink (LINK). Looks likely to close back above its 200-day moving average ($25.61) today, with the 50-day moving average ($29.31) as a clear target level.
Today’s Winners: Shiba Inu (SHIB) +7% after being listed on Kraken Exchange. Ethereum (ETH) is looking to close back above the $4,600 level.
Today’s Losers: Cardano (ADA) does not look to be recovering with the rest of the large-cap DeFi coins, a sign that Cardano may end up getting left in the dust by other trending projects like Solana (SOL) and Avalanche (AVAX).