Ethereum and Litecoin make a move while Bitcoin price searches for firmer footing

Cryptocurrency price action has been rough in recent months, but some green shoots are finally starting to emerge.

While Bitcoin (BTC) remains in a downtrend, its price has recently found support at the $17,000 level, and the ping-pong price action in the $16,700 to $17,300 range seems to be allowing traders to look for some interesting setups in some alternative currencies.

Let’s take a quick look at some attractive patterns appearing on the weekly time frame.

Is it time to halve Litecoin’s hopium?

LTC/USDT 1-day chart. Source: TradingView

As a fork of Bitcoin, Litecoin (LTC) tends to turn bullish several months before its reward is halved, as was the case in 2015 and 2019.

litecoin next half reward 237 days to go, and it looks like the altcoin is experiencing a bit of a pre-halving hype. Since November 6, LTC has gained 58.6%and it is beginning to reflect the triple price action that occurred in previous halvings.

The Guppy Multiple Moving Averages (GMMA) indicator on the daily time frame has also turned green, something that rarely happens.

From a technical analysis standpoint, LTC is trending for higher lows, consolidation, and bull flag breakouts, which are then followed by further consolidation.

If LTC maintains its current market structure and continues to sail along the 20-day moving average, its price could see a pre-halving rise to the $100-$125 area.

Ether charts its own course

The ETH/BTC weekly time frame shows some notable developments. Depending on how one looks at it, a nice reverse head and shoulders could be in the making.

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ETH/BTC 1-day chart. Source: TradingView

It could also be argued that the ETH/BTC weekly shows a massive cup and handle pattern.

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ETH/BTC weekly chart. Source: TradingView

Like Litecoin, the GMMA indicator on the ETH/BTC weekly pair has been bright green since August 8, which is almost four months.

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ETH/BTC weekly chart. Source: TradingView

Ether’s price action on its US dollar and BTC pair is surprising, especially given the state of the market in general.

Despite this short-term bullish outlook, the ETH price could be affected by red flags such as censorship of the Ethereum blockchain, compliance by the US Office of Foreign Assets Control and the Securities and Exchange Commission. and the Commodity Futures Trading Commission change their view that Ether is a commodity.

On-chain data tells an interesting story

Looking at the on-chain data provides a bit of color. Data from Glassnode shows that since Nov. 7, Ethereum addresses with balances greater than 32 ETH, 1,000 ETH, and 10,000 ETH have been trending upwards.

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ETH address balances. Source: glassnode

While the uptick is small, it’s important to keep an eye on growth metrics such as new Ethereum addresses, daily active users, increases in a variety of balance cohorts, and holder win percentage, as they will eventually they could mark a change in trend and sentiment.

Comparing these metrics with trading volumes, price, and other technical analysis indicators can help investors get a more complete picture of whether taking a position in ETH is a good idea.

ETH’s MVRV Z-Score is also showing some signs. Similar to on-chain analysis of Bitcoin, the MVRV Z-Score examines the current market capitalization of the asset against the price at which investors bought it.

The metric can suggest when an asset is overvalued or undervalued relative to its fair value, and tends to signal market caps when market capitalization is significantly higher than realized capitalization.

According to the three-year MVRV Z-score chart below, the Z-score is back in the green zone.

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ETH MVRV Z Score. Source: glassnode

Related: Approach With Caution: Cryptocurrency Warning From US Banking Regulator

Given the uncertainty in the market, concerns related to strict cryptocurrency regulation, and unresolved threats of insolvency, bankruptcy, and contagion from the FTX debacle, it’s hard to tell if it’s time to invest heavily in ETH.

Risk-averse traders looking to pull the trigger might consider going long and short spot via futures. That way, if one is long-term bullish on ETH, they can build a position while also protecting against the short-term downside.

This newsletter was written by Big Smokey, the author of The humble pontificator Substack and resident newsletter author at Cointelegraph. Every Friday, Big Smokey writes market insights, trend guidance, analysis, and advance research on potential emerging trends within the crypto market.