Macro guru and Real Vision CEO Raoul Pal believes Ethereum (ETH) is gearing up for an explosive move.
In a new YouTube strategy session, Pal says that the leading smart contract platform by volume is forming a bullish wedge pattern on its weekly chart, setting the top altcoin up for a breakout.
[adinserter block="1"]“The weekly chart of Ethereum hasn’t yet broken out, but it’s very close. So whether we break out this month, which is my hunch, and then maybe retest in the January pullback from liquidity, or we pull back here for a bit and then explode through afterward, either way, that chart, that wedge pattern, to me, is one of the most powerful patterns in all of crypto and suggests we’ve got a very big move in Ethereum to come.”
Pal also believes that Ethereum paired against Bitcoin (ETH/BTC) could shoot up based on the ISM Manufacturing Index, which is viewed as an indicator of the health of the US economy.
“The business cycle is the coincident factor for the Ethereum/Bitcoin cross. So that says as the ISM starts rising ETH starts outperforming Bitcoin. And why is that? Well, it’s a function of ISM being confidence in the economy, disposable income or free cash flows from businesses.
People have more money and feel better and have more confidence as the ISM goes up. The business cycle’s better. We’re earning a bit more. Our businesses are doing better, we’re making a bit more profit. And we recycle those profits into investments, and we go further out in the risk curve, which would be Ethereum.”
The former Goldman Sachs executive goes on to note that ETH/BTC is also forming a bullish wedge on its weekly chart.
“It’s another wedge. This is the ETH/Bitcoin weekly cross. Look at the big picture. ETH basically is at the same level versus Bitcoin that it was in 2017. It has held value over time, which is very important. It shows that this thing is around and it’s here to stay.
So what we’re doing is bouncing off the bottom channel now, just as the ISM is about to pick up, and we either break that wedge, which is a big deal, because that would be ETH outperforming Bitcoin even further, or we stay in that larger range but get to the top of the range. My base case is we breakout and ETH outperforms.”
ETH/BTC is trading for 0.03501 BTC ($3,354) at time of writing.
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