• Francisco Hernandez

S.S. Ethereum rides the tide that is Bitcoin's 2020 Halving

Ethereum has been rising with the tide that is Bitcoin's 2020 Halving. Since taking a hit, along with all other asset classes, Ethereum rose ~132%! Of course, the price is still down from the yearly high. Currently price sits above all the moving averages. From the yearly bottom, Ethereum rode the 20-day MA up to the 50-day MA. Price tested the 50-day MA before breaking through only to meet the 200-day MA. Ethereum blew right through it and eventually made it past the 100-day MA. Currently, Ethereum is in the low $200 range.

Moving averages.


The Bollinger Bands tell similar story. Price rode all along the upper band, even breaking out over the band. Price only did this 3 times, with the most recent break out a couple days ago. Typically, with BBs, it is ideal for price to continue to meet and/or break out of the upper band. If price closes outside of the upper band, chances are the next candle will try to do the same thing--push up higher.

Bollinger Bands.


The On Balance Volume is forming a wedge, with three peaks at top line and two on the bottom line. Given the nature of the Halving, Ethereum's OBV will likely see an upward move testing the upper line once more. However, this wedge is long with the lines narrowing more towards June.

On Balance Volume.


I see a similar wedge forming with the Chaikin Money Flow, except this one is closer to the end of the wedge. The CMF is over the zero line, indicating there is slightly stronger buying pressure. Notice, though, the CMF is pointing down. Again, given the Bitcoin Halving, there is a good chance the CMF will rise and break out of the wedge.

Chaikin Money Flow.


The MACD has been in a bullish trend wince the yearly low. The MACD line (blue) had been rising farther and farther away from the signal line (red) all through mid-April, indicating increased upside momentum. Since then, the MACD line has been moving almost completely parallel to the signal line. This can also be seen with the histogram (green). The bars rose up through April indicating the spread between the MACD line and the signal line had been increasing. After, that the histogram runs flat, indicating that momentum has remained steady.


Take away

Ethereum was a good one all into 2020, then the world was hit with a pandemic. Ethereum dumped and set a yearly low. Price already rose ~132% and it can still go more. However, this does not have to do with Ethereum particularly. Ethereum is riding on the coattail of Bitcoin's 2020 Halving. Bitcoin is the tide that raises all ships and Ethereum is in for a ride. Any short-term gains will be a result of positive market sentiment, a bias. I do not expect the gains to stick though. I expect after the 2020 Halving there will be a correction. Additionally, the Halving may also have some unintended consequences for Bitcoin. Under the premise that Ethereum is riding on Bitcoin's coattail, Ethereum will also be affected by any of these consequences whether good or bad. In the current, environment TA can only provide so much insight. The Halving is approaching, and the tides are rising. I hope you all have a good ride.

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