This week, the SEC has a deadline to make a decision on whether the Ethereum ETF will be approved.

The market widely expected that the ETF would be denied.

But in an unexpected turn, the SEC asked $ETH ETF providers to update key filings.

This led an ETF Analyst at Bloomberg to update the probability that an ETH ETF gets approved this week to 75%:

At this point, without concrete proof that the ETF will get approved, this is a rumor. It has more likelihood of happening, but it’s not a sure thing.

It could still be that the SEC denies the ETF this week, causing the move to get retraced.

We don’t know what will happen. That’s why we keep aware of the news, but look to the charts to help us decide how to trade.

If the Ethereum ETF gets approved it could be a pretty big turning point for the market and kick off a wider alt run.

Onto the charts…

The $ETH Chart

First let’s look at the Ethereum chart.

We haven’t covered it in this newsletter but Jesse’s been regularly posting about it on Twitter and talking about it on the livestream.

Three days ago, Jesse posted the $ETH chart below:

It had four bullish signals marked out:

1. Pending buy signal on the Sharp Shooter Indicator 
   These candles are in green. It’s the fifth buy signal, since the downturn started. So that alone might not be enough to convince you to take a trade.

2. Bullish divergence
   This is the yellow circle Jesse was drawing, showing that price was making lower lows while RSI was making higher highs. This is indicative of a bullish reversal in momentum.

3. Support at a target box.
   The target box in green was an area that Jesse was looking for Ethereum to find support, and it did. Setting this expectation helped Jesse be ready to take a trade when momentum changed.

4. Price broke the inner trendline.
   This is a place where traders could take an aggressive early long because it shows price is changing momentum—but it’s also close to support, which if broken would invalidate the trade idea.

Jesse went a bit further to show the yellow squiggly line, where $ETH might put in a higher low before going higher.

Earlier today, Jesse posted an update to the chart where price was butting up against the outer price trendline.

Then boom! The candle blew up on the ETF rumors.

Of course, Jesse knew nothing of the ETF news when marking out the trades. But by following price momentum, he could tell where $ETH might turn around.

$ETH / BTC Chart

If the $ETH ETF gets approved—or the market starts expecting with that the ETF will get approved soon—this could mark an important turning point.

One way to see that in the charts is through the $ETHBTC chart.

What this chart shows is how much investors prefer $ETH versus $BTC at any point in time.

If investors prefer $ETH, this chart goes up. If investors prefer $BTC, this chart goes down.

In the case of $ETH / BTC, it’s been going down for quite some time now:

But there’s several reason why this might be a key reversal on the $ETH/$BTC chart:

1. A 600+ day downtrend
   That’s almost two years! Two years where investors have been preferring BTC over ETH. Consolidations happen in both price and time, and from a time perspective, a macro reversal could be possible.

2. Bullish divergence on the weekly.
   While price has been making lower lows, RSI has been making higher lows, indicating a shift in momentum. Since we’re looking at the weekly chart here, it means the reversal could also be a trend on the weekly timeframe.

3. Key support at the log .618 fib and Feb 2021 high.
   Hitting a key level like this makes it more likely that a macro low could be in. Reversals often happen at key supports.

Can $ETH / $BTC go lower?

Absolutely.

But the reasons abover are why the low could be in. We’ll be watching to see if it makes a higher high and higher low next.

BTC.D

If the bottom is in for $ETH/$BTC, then it’s quite likely the top wold be in for BTC.D.

BTC.D is the percentage that bitcoin makes up of the total market cap of the crypto market. Right now, it makes up ~55% of the total crypto market cap.

On the BTC.D chart, we can see bearish divergence on the weekly chart, where price is putting in higher highs and RSI is putting in lower highs.

BTC.D almost has hit the key level of log .618 too, but not quite.

It’s certainly too early to call the top of BTC.D, but it’s worth continuing to watch.

Typically, when BTC.D starts dropping after BTC runs up this much, it means we’re getting closer to alt season, where alts run hard.

We’ve already been seeing hints of this with $PEPE leading the way, as Jesse noted on Twitter:

Today could be a pivotal day for the crypto market. Could also be nothing 😄 

Happy trading!

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Disclaimer

The contents of this newsletter are expressed in my opinion only, none of which is financial advice. Always do your own research as this information is intended for educational & entertainment purposes only.