In the last couple of months Bitcoin took all the spotlight and it was well deserved. Man, the run Bitcoin had was probably unthinkable even by the most wild crypto bulls. While it still could run higher, maybe a lot higher, it could be time for Ether to take the turn and outperform.
Why not, we’ve seen a crazy rally in Bitcoin, a pause therefore wouldn’t be surprising and it wasn’t uncommon for them to take turns. On the other hand Ether is consolidating early 2017 gains for approximately 5 months now, but what’s nice is that it recovered very well after yesterday’s negative news and the bulls were able to reclaim $300 level and as of writing it’s trying to reclaim a very important $310 level.
From the chart below we can see that the last time ETH/USD rallied was alongside the ratio ETH/BTC or in other words in time of ETH’s outperformance. Similar happened in early 2016 too!
But why would now just all of a sudden Ether start outperforming Bitcoin and also start rallying against fiat currencies? In this post let me present you a few charts why I think that is possible.
Let me start with showing ETH/BTC ratio again. This time a slightly longer term picture. One can notice that the ratio is at a crucial support level. This doesn’t necessarily mean that the price will turn higher from now on, but that RSI divergence (in green) is giving some hope that it definitely could!
Intentionally I didn’t want to start the post with ETH/USD’s price chart, clearly the most important chart if you’re holding Ethers, but wanted to give you some introduction to gain a slightly different perspective.
If we now take a look at the ETH/USD chart starting with Q4 2015. We see that Ether’s chart looks like a stepwise function, where the increase in price in early 2016 was 17 fold while in early 2017 was stunning 50 fold.
No wonder the price needs some time to consolidate those massive gains. I guess no one can predict by how much Ether could rally, but if the price resolves higher and we see similar moves as in the past, it could run to somewhere between $6,000 and $17,500.
The more time the price consolidates in this tight trading range, the higher the likelihood of another big rally some time in the future. And as mentioned earlier, I wouldn’t be surprised if the move would be imminent.