Summary Bitcoin's bull market continues with a target of $125K, while Ether's performance against Bitcoin has softened. I have shifted focus to Bitcoin as their primary swing trade asset in the crypto space. The ETHBTC pair suggests that upward momentum currently favors Bitcoin, leading the author to increase their Bitcoin allocation and flatten their Ether position. The bull market in Bitcoin (BTC-USD) rages on, and I have no reason to move away from my target of $125K. Bitcoin also held the more aggressive bullish support level of $36K discussed in the article I wrote in January after spot ETFs began trading on US exchanges. This more bullish count, which I called the red count in the article, showed the next target as $66K, which was also an attack on the previous all-time highs made in 2021. That level was struck in early March, but Bitcoin stretched a bit further to $73K before starting the flat correction it is now working through. I expect this correction to hold $50,600, and if it does, Bitcoin should reach $88K before the next bout of sideways movement. Current Bitcoin 1D Chart (Created by the author with Motivewave Software) While Bitcoin is looking good, Ether (ETH-USD) has softened quite a bit in its performance against Bitcoin. While I have not turned bearish on Ether on a USD basis, I find using it as a primary swing trade vehicle uninspiring when Bitcoin solidly outperforms. I traded Bitcoin and other cryptos actively for the last three halving cycles. In the first, from 2016 to the 2017 top, my main holding was Ethereum, simply because I had a better handle on the chart. But for reasons that would take another article to explain, Bitcoin became my primary long-term asset in the crypto space. Despite my using Bitcoin as a core holding, Ethereum has often been a better swing trade asset. It displays a high correlation to Bitcoin, yet often outperforms Bitcoin during brief slices of a cycle. I wrote an article in August of 2023 that suggested one of those periods of Ether outperformance would soon start. Had that setup held, we would have entered a phase in which Ether outperformed Bitcoin. Yet it failed, as did one more such setup after that article was published Fortunately, if you held some Ether (as I have since I wrote that article), you fared well. It has nearly doubled in price since that article appeared. However, as we are in the latter stages of this bull market and it is showing no further inclination to outperform, I have soured on Ether as the better swing trade vehicle. And I have my doubts that it will gain another chance to outperform, based on the current microstructure of the ETHBTC pair. The current action in the ETHBTC pair shows a small chance of a local reversal off 0.046, sending it to 0.06. That isn’t a sufficient move to favor Ether, and the local reversal is fraught and looking corrective. It appears more likely to drop to 0.041 in red-v. We can watch for another attempt at that level. ETHBTC (Created by the author with Motivewave Software) It Gets Worse As if that wasn’t enough, the USD chart for Ether has hit a speed bump. Its low on April 8 broke what I considered impulsive support in its third wave, which started with a confirmed breakout on November 23. Breaking impulsive support doesn’t mean that I must discount the $10,500 Ether target that I have long held. However, it does suggest the path to that target may be slow, while Bitcoin is on a more direct path to its target. I am now watching Ether’s 2023–24 structure as an ending diagonal, now in C of its third. This puts the microstructure in wave 1 of that C, provided it holds $2480. This 1-2 setup gives me a target of $7300 for circle-3 of wave-3. That’s a nice healthy double from here if the setup works. Ether’s structure becomes quite murky below $2480. My favored view is that the structure from the 2021 top until now would turn into a long three-year triangle before its final push to $10,500. That is illustrated in time. ETHUSD 1D Chart (Created by the author with Motivewave Software) A Question of Momentum Astute readers will have some basic questions at this point: ‘Why are you more bullish on Bitcoin when your Ether targets suggest a higher return?’ And, ‘Why are you shifting your view amid a potential micro setup that can double the price of Ether, while Bitcoin may tack on 50%?’ In reply, I say that a comparison of the two coins’ targets in USD is not enough to answer the question of which chart outperforms. The targets suggest where the USD charts should go, but not how fast. The ETHBTC pair seeks to address the question of timing. As long as the pair is locked in a downtrend, upward momentum favors Bitcoin. I will change my view and get back to aggressively trading Ether once the ETHBTC pair sets up better. One way in which this puzzle may find a solution is that Ether peaks later than Bitcoin. When Bitcoin topped in late December 2017, Ether took almost another two weeks to top, in January 2018. Ether also rallied one further month after Bitcoin’s April 2021 high. We may see something similar in this cycle, with Bitcoin topping at $125K, and Ether taking another week or month to reach $10,500. Getting out of Bitcoin and taking the last push in Ether is a dangerous affair, in my experience. Once Bitcoin lays in major tops, the crypto market slowly transitions into deflation. And crypto bear markets are uniquely brutal. Bitcoin usually loses 60% or more, and many altcoins never again see their cyclical all-time highs as they fade into history. BTC and ETH's Peaks in 2017 and 2021 (Created by Author with Tradingview) Conclusion In summary, after being patient with the incessant downtrend, and multiple setup failures in the ETHBTC pair, I am slowly flattening my Ether position, in favor of increasing my Bitcoin allocation. This was not a rash decision. Honestly, I see myself as having given Ether a lot of grace. I have held a swing position in Ether through all the setup failures in ETHBTC. Of course, I did not hold it to my financial detriment. The return in Ether over 2023–24 may make many stock swing traders envious. There is always a chance that I was so late to decide to flatten my Ether position that finally it turns. However, I must trade what I see, and as it stands today, I see no reliable reversal in the ETHBTC pair. Further, I can move back to Ether quickly if the edge changes.
