Macro guru and CEO of Real Vision Raoul Pal believes Ethereum (ETH) is gearing up for an explosive move.
In a new YouTube strategy session, Pal says the leading smart contract platform is forming a bullish wedge pattern on the weekly chart by volume, putting the top altcoin on track for a breakout.
“Ethereum’s weekly chart hasn’t broken out yet, but it’s very close. So whether we break out this month, which is my hunch, and then maybe retest during the liquidity pullback in January, or whether we pull back here for a while and then explode afterwards, either way, that chart, that wedge pattern, for me, is one of the most powerful patterns in all of cryptocurrencies and suggests we are in for a very big move in Ethereum.”
Pal also believes that Ethereum combined with Bitcoin (ETH/BTC) could skyrocket based on the ISM Manufacturing Index, which is seen as an indicator of the health of the US economy.
“The business cycle is the coincident factor for the Ethereum/Bitcoin cross. So that says that as the ISM starts to rise, ETH will outperform Bitcoin. And why is that? Well, it is a function of ISM: confidence in the economy, disposable income or free cash flows of companies.
People have more money, feel better and have more confidence as the ISM rises. The business cycle is better. We earn a little more. Our companies are doing better, we are making slightly more profit. And we recycle those profits into investments, and we move further up the risk curve, which would be Ethereum.”
The former director of Goldman Sachs further notes that ETH/BTC also forms a bullish wedge on the weekly chart.
‘It’s another wedge. This is the weekly cross between ETH and Bitcoin. Look at the big picture. ETH is actually at the same level against Bitcoin as it was in 2017. It has retained value over time, which is very important. It shows that this thing is here and it is here to stay.
So what we do now is bounce the lower channel just as the ISM is about to pick up, and we break that wedge, which is a big deal because that would mean ETH outperforms Bitcoin even further, or we stay in that larger range, but reach the top of the range. My base case is that we break out and ETH performs better.”
ETH/BTC is trading at 0.03501 BTC ($3,354) at the time of writing.
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