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Ethereum attempts to stabilize after smooth hard fork

In Insights

In this week's analysis from Darren Chu, CFA, founder of Tradable Patterns, we look at how Ethereum (ETH) has fared after the recent hard fork and examine if there's any short-term hope in store for Bitcoin bulls.

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Ethereum looks stable after fork

Ethereum (ETH/USD) is trying to stabilize after the profit-taking leading up to the February 28 hard fork.

The fork passed smoothly and ETH/USD reversed from an overbought daily Stochastics reading last week to being oversold.

ETH/USD looks poised to resume its multi-week bounce (off the upper end of the pre-H22017 rally range) and to retest the psychologically key whole figure of 150.

The weekly RSI, Stochastics and MACD are rallying or consolidating.

Trade Ethereum

Longer-term bulls will increasingly buying on dips as the sector overall gains interest from:

  • Coins being developed by leading messenger apps (Facebook/Whatsapp, Line, Kakao).
  • Coins being developed by banks (JP Morgan, Mizuho, Bank of Tokyo-Mitsubishi UFJ).
  • The upcoming launch of BAKKT.
  • Fidelity's institutional offering.
  • Increasing regulatory clarity and recognition for STO exchange operators/issuer.

Specifically regarding the Ethereum blockchain, the recent fork positions it for greater scalability, better processing time for developers and improved network economics.

ETH/USD bulls are looking forward to further scalability improvements in the form of Proof-of-Stake and sharding, scheduled for 2019-2020.

Bitcoin bulls grasp hope

Bitcoin (BTC/USD) saw some profit-taking this past week but continues an ongoing effort to bounce off near the June 2017 high and September 2017 low, and reclaim the psychologically key 4,000 USD whole figure level.

Significantly, BTC/USD has edged past a one-year downtrend/triangle resistance (on the weekly chart).

Trade Bitcoin

The weekly RSI, Stochastics and MACD are bottomish or consolidating.

Bitcoin bulls are increasingly encouraged by scalability improvements from the growth of the Lightning Network and the third Bitcoin block reward halving (which will reduce the amount of new BTC supply) scheduled for May 2020

Historically (for the 2 other halving events) we’ve seen bull runs begin roughly one year in advance of the halving date.

XRP continues bounce

XRP (XRP/JPY) continues an ongoing effort to bounce off the support line connecting the August, September and December lows. 

Trade XRP

As Ethereum (ETH/USD) and Bitcoin (BTC/USD) make progress in bottoming (on their weekly and daily charts), XRP/JPY is also attempting a sustainable major bottom after the formidable bear of 2018.

This content is not financial advice and should not form the basis of any financial investment decisions nor be seen as a recommendation to buy or sell any good or product. Trading cryptocurrency is complex and comes with a high risk of losing money, particularly if you trade on leverage. You should carefully consider whether trading cryptocurrencies is right for you and take the time to learn how trading works and decide how much money you are prepared to lose.

WRITTEN BY

Darren Chu, CFA

Darren Chu, CFA, is the founder of Tradable Patterns, publisher of daily technical analysis on Bloomberg, Thomson Reuters, Factset, Interactive Brokers, Inside Futures, and other partner websites. Before the launch of Tradable Patterns, Darren served as IntercontinentalExchange | NYSE Liffe's country manager for Australia, India, and the UAE, expanding his role to look after Liffe business development in APAC ex-Japan/Korea until his departure mid April 2014. Previously, Darren was with the TMX Group | Montreal Exchange, marketing Canadian futures and options across North America, London, Singapore and Hong Kong. Darren also launched and managed CMC Markets Canada's Chinese marketing and sales team, along with educational offering. Visit www.tradablepatterns.com for more information.