We’re going to keep this post short and sweet.
The only setup in the entire crypto market that still has a weekly squeeze in play is ETH/BTC.
What does this mean?
ETH/BTC is the ratio of Ethereum (the largest alternative coin) to Bitcoin.
What does that mean?
Think of it like silver and gold. Typically, they will move together, but in a true bull market in metals we typically see silver outperform. The same thing holds true in crypto. Typically, Bitcoin gets the party started and moves the entire market. It then goes into a holding pattern and money flows from Bitcoin into the rest of the market.
That is what we are seeing in this chart, or at least the early-stage signal. I don’t expect this dynamic to play out until the entire market turns, but the stage is set for altcoins to outperform on the next leg.
We can see on this weekly chart an inverse head and shoulders pattern across a previous major pivot. We also see higher lows and higher highs and an ideal weekly squeeze pattern.
This is the setup that will drive Ethereum and all other altcoins to outperform relative to Bitcoin. For now, in the short term I still would like to see Bitcoin to test $28,000 support, if that level breaks, I see it getting to $23-$20k.
However, if it shakes out between now and then, we need to focus on the entire crypto market going forward, not just Bitcoin as the message of the charts.