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On May 5th, I wrote about Bitcoin (BTCUSD).
It was my first public post about a cryptocurrency even though I began explaining my outlook for Bitcoin to DPA members in early April.
My bullish case for cryptos such as Bitcoin and Ethereum (ETHUSD) is simple.
With central banks printing like mad, stocks unjustifiably expensive (and unstable), and US treasury yields collapsing, where do investors go for a return on their capital?
The traditional answer has been precious metals like gold and silver.
And while I’m bullish on both of those metals over the next five to ten years, I think digital assets like Bitcoin and Ethereum are the future.
Some will disagree with me, and that’s okay.
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Many still believe digital assets like Ethereum are a joke, which I think is a massive mistake, but to each their own.
Regardless of your view, I think the charts below speak for themselves.
Before I get to the ETHUSD chart, I want to illustrate why I think there’s a very good chance that Ethereum outperforms Bitcoin over the next few years.
The monthly chart above shows how the price of Ethereum has performed relative to that of Bitcoin.
As you can see, one Ethereum is currently equal to about 0.025 Bitcoin or just 2.5%.
But what you’ll also see from the ETHBTC monthly chart above is the recent higher lows.
It’s still early, but a sustained move above the recent swing high at 0.028 would be the first higher high in this series.
Even the year-to-date gains of the two prove my point.
So far in 2020, Bitcoin is up an impressive 34%.
But even more impressive is Ethereum’s 88% YTD performance.
I think that out-performance continues, but that’s just my opinion.
As for ETHUSD, I think this market has huge upside potential.
The market appears to be carving a new multi-year higher low, and is nearing its first higher high in the series as well.
Just bear in mind that cryptocurrencies like Ethereum are still in their consolidation phase.
These markets are also known for their volatility, which is why I’m a fan of dollar-cost averaging, which is what I’ve been doing for weeks now.
As for key levels to keep an eye on for ETHUSD, I think the trend line from the all-time high in 2018 could be a factor.
A weekly close above that area around $230 would be an impressive development.
And a sustained move above the recent swing high at $290 would confirm the start of a new post-consolidation bull trend.
Key resistance above $290 comes in at $350/60.
Disclaimer: I hold a long position in Ethereum and will continue to buy dips with an investment horizon of two to four years.