Ethereum & Litecoin Immediate Levels To Watch This Week

5 min readMay 25, 2022

Following a seemingly never-ending litany of market carnage, most altcoins are in dire straits. Arguably, that’s the opportunity one should be waiting for — but what if majors trend lower? While unlikely, it’s not a bad idea to wait for favourable conditions before discussing tail-end altcoins at this stage.

As such, we’ll only cover two blue-chips this time around.

Let’s dig in.

Dear readers,

The purpose of this newsletter analysis is to provide context to current events and cryptocurrency markets. It is released every Monday and Wednesday. I am not perfect and this is not a science — nor is this newsletter a signals service. While I cannot promise perfection I do my best to be honest and transparent.

Thank you for reading.

Feel free to contact me with feedback on contact@chrisoncrypto.com.

Tether Stablecoin Market Dominance Challenged as USDC & BUSD Gain Traction

Tether has witnessed some $10 billion worth of redemptions since the TerraUSD (UST) implosion, all the while USDC and BUSD experienced relative growth year-to-date.

Tether and Bitfinex CTO Paolo Ardoino made light of the then-snowballing redemptions, asking the next up-and-coming algorithmic stablecoin on Twitter to “ use another letter at the end of it’ name that’s not a ‘T’.

Read the full article here!

Technically speaking

Ethereum Echoes Bitcoin To The Letter

Ethereum has shown its true colours as a secondary copy-trade to Bitcoin. Ethereum’s Market structure has practically mimicked Bitcoin’s with increased volatility for nearly a year now. It’s arguable that BTC/USD & ETH/USD are the same trade from a technical standpoint.

Ethereum/Dollar is down -1.9% over the week, developing a series of downside wicks and a hammer-reversal candle on the weekly close. Any moves in the BTC/USD pair are likely to be exacerbated for ETH/USD, given the increasingly risky altcoin premise for digital assets.

An Ethereum/Dollar rally is effectively contingent on a Bitcoin/Dollar rally, which is in turn contingent on stock market performance, at least until it isn’t.

Locally, ETH/USD is below structural support ($2,000) at the time of writing, leaning in a bearish posture.

Price-action has been consolidating within a tight range since the break-down and reclaim (12th May). The rough range is $1,900 — $2,100. A daily close outside this range on lower-time-frames will likely inform directional bias until the end of the Month.

Admittedly, given the severely oversold nature of the market, there’s a good case to be made for a robust reversal/relief rally. But that’s not all; at these depressed levels, the case for another week(s) or month of more selling is not compelling. Regardless, downside targets for ETH/USD would be $1,350 and $1,000 respectively in the event that the roll-over snowballs.

On a weekly time-frame, a close above $2,100 would signal a (20%) rally to $2,500, and potentially to the top of the descending wedge ($2,900).

To summarise, market structure looks horrendous — as bad as it’s ever been. But as discussed on Monday, the macro tradfi backdrop is showing indications that a reversal is about to take place. This is the place to be a contrarian.

Is Litecoin Looking for an Angle of Ascent?

Litecoin/Dollar trades at $69.50 at the time of writing. For the better part of a week, the coin has been on a modest weekly uptrend against Bitcoin, closing 5% higher on the LTC/BTC pair week-on-week.

Once again, LTC/USD has a similar market structure to BTC/USD, with key liquidity resting below $64 and $75. The question isn’t so much “which direction”, as much as it is “which comes first?”. Despite the technically and fundamentally compelling reversal signals which cannot be understated at these depressed levels, prices have yet to reflect that eventuality and this is a reality that must be contended with until proven otherwise.

Litecoin/Dollar must reclaim $75 on low time-frames, but the uphill struggle does not end there. LTC/USD requires a close above $96 by the end of May in order to maintain a (historically significant) bullish monthly-super trend.

This is not a time to sleep on Litecoin, it’s the time for bulls to ‘save private Litecoin’ as the project fights for its continued relevance (and ultimately existence). The current situation can change fairly dramatically, fairly quickly.

Charlie Lee likes to say “Litecoin already succeeded”, and certainly it has come a long way in terms of adoption. But success is more a process than a destination, and “number go up” technology is an expression of that relative success (which begets more success).

Litecoin’s growing user-base has stepped up its game too — that much is clear. Development updates, a marked increase in coverage and good old-fashioned fundamentals are only trending higher, yet this hasn’t been reflected in price.

In all probability, an inflection point is coming. The same cannot be said for compromised projects like Solana. Additionally, tailwinds for privacy-enhancing tools and coins are also reaching a new paradigm as we speak.

“Do not go gentle into that good night.
Old age should burn and rave at close of day;
Rage, rage against the dying of the light.” — Dylan Thomas#btc #ltc
- Chris on Crypto (@ChrisOnCrypto1) May 25, 2022

p.s. This is my opinion. It is not financial advice.

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