With Bitcoin in a bubble we are looking for a deeper correction to come as proposed earlier:
Now at $10,000, Bitcoin is leaning against a critical support level and last line of defense below which our deeper target could be swiftly met if a bounce does not take shape any time soon as proposed and considering that a) the volatility envelop is very broad, b) the trend is now only slightly up and c) the price is capped by the 7-period moving average:
With this downside risk now posited and by the same token (pun intended) with the crypto universe uniformly following the footsteps of Bitcoin it may be profitable to look at how some of its cousins perform on a comparative basis. For that purpose all the charts shown here below are on a weekly price scale.
ETHUSD is still trending up and doing so more strongly than Bitcoin does, but as well with a very high level of volatility which may prevent significant upside.
This comparative strength of Ethereum over Bitcoin translates, as we recently proposed into: With Ethereum Outperforming Bitcoin ETHBTC is a Better Long Idea than ETHUSD with a significant upside potential up to previous all-time-high of 0.152:
The young “Alibaba coin“, NEOUSD is still in a clear uptrend but recently receded from the all-time record it made at $198. As long as the rising support (blue line) holds the uptrend remains healthy:
Nevertheless, the NEOBTC ratio is stronger than NEOUSD since it is attempting to break decisively above its recent price record with significant bullish potential ahead. In the mean time the 0.015 target we proposed when the ratio was at 0.0128 four days ago has been swiftly and exactly attained and now marks a newer all-time high:
The XRPUSD weekly price chart does not look very much different from the Bitcoin one and so the risks are the same:
However, looking at the XRPBTC price ratio we can notice a stronger uptrend with a clear possibility for Ripple to soon outperform Bitcoin. Sho)uld this happen the ratio could attempts to move back in direction of the upper boundary of the very broad pennant pattern defined by the converging blue lines:
Last but not least the ZECUSD price ratio has accompanied BTCUSD lower and did not follow the script we had written for higher prices to develop. Nevertheless ZECUSD is now leaning on a strong support level from where it could bounce more significantly than Bitcoin could and it should now break above its recent top at $485 to confirm a trend continuation higher.
It may be worth reminding that the Zcash total coin supply is going to be 21 million like Bitcoin, and it even follows the same issuance rate and since it is gaining acceptance as a mean of payment and transactions but with additional privacy features compared with Bitcoin it should be expected for the ZECUSD and BTCUSD prices to converge towards parity, which would translate into Zcash significantly outperforming Bitcoin in a not too remote future. Currently located around 0.04 the ratio may be forming a bottoming, inverted Head-And-Shoulders pattern. A break above the red neckline should confirm the expected outperformance of Zcash over Bitcoin:
Given the uncertainty in the price direction of Bitcoin and the price downside risk it looks like an attractive proposition to have instead long positions in altcoin/bitcoin pairs that are selected from altcoins that appear to be outperforming Bitcoin, in particular Ethereum and Neo, but as well Ripple and Zcash.