Ethereum & Litecoin Show Robust Structural Bottom Signals.

5 min readMay 18, 2022

Following last week’s crypto carnage, altcoins have begun a recovery process that supports the idea of a market-wide bottoming process.

Ethereum’s recovery has surpassed that of Bitcoin, while Litecoin’s recovery has so-far surpassed both majors. But is this recovery just a function of increased volatility along the risk curve or is the market beginning to value reliable protocols that simply work?

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.

What Do Crypto Whales Do With Their Wealth?

Crypto is awash with users from all walks of life. Likewise, user wealth varies widely, from newcomer shrimp with entry-level portfolios to 8-figure OG Bitcoiner wallets and crypto whales.

But what do whales do with their wealth, and can you do that too?

Read the full article here!

Ethereum Jumps 25% on the Weekly Close

Ethereum/Dollar is down 5% since last Wednesday after having recovered 25% from the dramatic sell-off on May 12th.

Unsurprisingly, ETH/USD followed the same price-action as BTC/USD and so far has retained a similar market structure, albeit with a more convincing weekly close.

Exchanging hands at $2,030, the coin trades above monthly super-trend support ($1,859) at the time of writing. ETH/USD also closed above the psychological support cluster on the weekly ($2,000), which coincides with the falling wedge structure outlined last week.

Structurally, ETH/USD also looks promising on the daily time-frame, given that the pair has set itself up in a similar posture to BTC. This is a technical tailwind in my view.

Admittedly, On-balance-volumes have not supported the bullish outlook, but the context in which the capitulation event occurred matters. The market had to absorb 80,000 Bitcoin collateral due to UST’s insolvency episode, and altcoins almost invariably sell-off harder and faster than Bitcoin, including Ethereum. Systemic risk events like the Covid-driven March 2020 crash, and last week’s UST black-hole doom-loop skew charts which would otherwise tell another story.

For short-term swing plays, ETH/USD resistance could materialise at around $2,500, pending a stronger breakout from BTC/USD.

Should the market flip $2,500 into support (or pass straight through it), then the next point of contention (and perhaps de-risking) would be $2,900 — $3,000.

Bear in mind, there is no hard-and-fast rule for bottoming processes. Prices can either turn on a dime (Fed policy), or ETH/USD can opt for a long summer lull, but that’s more relevant for traders than investors. Long story short, just like Bitcoin, ETH/USD is exhibiting bottoming signals. Time will tell whether one can take that to the bank.

Additionally, provided Bitcoin remains correlated to traditional stocks like the Nasdaq, which are in turn reacting to Fed monetary policy, it’s worth keeping an eye on traditional finance too.

Polkadot On The Ropes

Polkadot/Dollar experienced an 87% drawdown since all time highs, going through a traditional bitcoin bear cycle with a blow-off capitulation candle and strong subsequent reclaim.

DOT/USD closed the week at $11.8, recovering 58% from the low in a matter of days. Price-action is traversing within the long-term value accumulation area (blue box), but the prospective reversal has yet to be confirmed by majors. If price gets above $13, the next area of resistance would be $18-$19. In the unlikely event that weakness persists, DOT/USD could revisit $5.

For now, all eyes are on majors.

Litecoin is a Sleeping Giant

Litecoin/Dollar trades at $71 after a brutal melt-down to $52 last week. The coin reclaimed 36% after the nuke, closing the week at around $71 outperforming both Bitcoin and Ethereum in the recovery process.

At the depths of the 2018 bear market, LTC/USD bottomed out after plunging below the 200-weekly EMA. By the time LTC/USD broke out it had spent a total of 28 weeks chopping in sideways accumulation. But Litecoin has been in a bear market for well over a year now (374 days), and with the 2023 LTC halving approaching, the cyclicality of the protocol should come into play sooner rather than later.

That said, if Litecoin has bottomed for the for foreseeable future (which I strongly believe is the case), then one could expect a reclaim of the 200-weekly to be followed by exponential price-action.

Locally, LTC/USD’s main target is closing above $96 by the end of the month (May). This would maintain a bullish monthly super-trend. Interestingly, LTC has been climbing up the ranks on coingecko of late, capturing the 18th position in the last couple of days as capital flows out of failed projects (LUNA) into reliable ones like Litecoin, which have the benefit of a realistic roadmap.

On another note, I’ve often wondered how people like Mike Novogratz openly shill Solana — a protocol that quite literally has to post working hours (i.e. it doesn’t work) — as opposed to supporting a protocol which has withstood the test of time and is about to launch the largest proof-of-work upgrade ( MWEB) ever tomorrow.

Seems like some of us are just built differently.

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

Join the Telegram channel for live updates!
Follow me on Twitter & Gab.