This is a daily technical analysis by CoinDesk analyst and Chartered Market Technician Omkar Godbole.
Traders looking for tokens that may see accelerated gains as bitcoin (BTC) rallies might want to focus on ether (ETH) and the ratio between bitcoin cash (BCH) and bitcoin.
Both have broken prolonged downtrends alongside bullish bottom formations in leading meme tokens DOGE and SHIB.
Ether breakout
Ether’s price has surged more than 8% today, piercing the trendline (see the left-hand chart) that represents the downtrend from December highs above $4,100. In other words, demand has finally managed to overpower the supply zone defined by the trendline, confirming a bullish shift in the market trend.
The three-line break chart (on the right) shows a similar breakout. The line break chart
focuses on price movements and changes in trend while ignoring time, helping traders filter out erratic price movements and noise. As a result, signals on the line break chart are considered more reliable and durable signals.
The breakout shifts focus to resistance between $2,300 and $2,400, the support zone from October and November.
BCH/BTC
The ratio between U.S. dollar prices for bitcoin cash and bitcoin has risen 11% this week, topping a trendline characterizing the brutal year-long bear market.
The bullish development suggests BCH outperformance relative to bitcoin in the coming days.
DOGE, SHIB bottoms
The market caps for DOGE and SHIB were up 7% and 5% at the time of writing, with their respective daily charts showcasing a “rounding bottom” pattern.
A rounding bottom happens after a significant downtrend, as in DOGE and SHIB’s cases. and signals a shift to a bullish market. It shows a change from lower highs to higher lows, indicating that buying interest is starting to increase.
