A popular crypto trader and market analyst is calling for Ethereum (ETH) to drastically outperform Bitcoin (BTC) over the next several months.
The pseudonymous crypto trader Pentoshi tells his 207,500 Twitter followers that he’s looking for Ethereum to form a higher low to build support for a further rally now that the token has broken out of its downtrend against Bitcoin.
“ETH MACRO VIEW
(Weeks/months) as we know extremes happen inside that
Simply outperforms BTC [in my opinion]
Broke out vs BTC on this massive flag
Would like a [higher low] on the USD pair after the 13 days of up only but that’s locally.”
Leading up to the highly anticipated implementation of EIP-1559, which is the Ethereum protocol upgrade that will burn a portion of ETH transaction fees, the second-largest crypto asset rallied for 13 days in a row before topping out at just under $2,700.
Pentoshi says that although EIP-1559 is good news for ETH, investors shouldn’t expect an overnight change in price.
“EIP-1559 won’t magically change ETH overnight
But it will reduce ETH inflation
Right now it’s 4.0% per year
PoS [proof of stake] will change it to 0.4% per year, a 90% reduction or = to a BTC triple halving
Add in fee burn, staking, smart contracts and supply > demand. Can’t price it all in.”
The trader outlines his thesis for ETH’s short-term price action, pointing to $2,550 as a key level for Ethereum to break.
“For ETH what you’d like to see
- People who sold to the left before the last breakout start to buy back at break even
- Shorts cover
- Large limit orders (intent) to fill a base here and create support
What happens at $2,550 is key. Break above = continuation. Reject lower.”
As for Bitcoin, Pentoshi is waiting to see how the king crypto asset reacts in the mid-$30,000 range and if it can reclaim $40,600. He also says that Bitcoin retested and lost support at the 200-day estimated moving average (EMA), which is currently priced just above $38,000.
“BTC still waiting for mid 30 keks [thousands] 34.6-37.3k or reclaim of 40.6 thousand
Progressing nicely thus far
Also have to take note of the 200D EMA retest and loss that took place.”
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Featured Image: Shutterstock/Maria Starovoytova