We took a look to see if the big rally in EOS could have implications for Ethereum (ETH) and Bitcoin Cash (BCH).
EOS vs. Bitcoin (EOSBTC) has broken out of bullish downward sloping wedge formation (Figure 1). This type of breakout from a downward sloping wedge mimics the physics of pushing a fully inflated basketball underwater. As soon as you let go of the ball (bears give up), the basketball goes straight up and flies out of the water (bulls rush in).
If this technical construct is correct, EOS can rally a lot more vs. Bitcoin (BTC).
We noticed that Ethereum vs. Bitcoin (ETHBTC) has a similar downward sloping wedge formation. ETHBTC is pressing right against the top of the formation (Figure 2). If Ethereum (ETH) gains more ground vs. Bitcoin (BTC), it is possible that Ethereum (ETH) could start rallying like EOS.
Based on EOS price action, there is also reason for optimism in Bitcoin Cash (BCH). Bitcoin (BCH) would have to double in price to fill a gap from the recent hard fork (Figure 3).
One reason to look at Bitcoin Cash (BCH) is that people hate it with a passion. Sometimes when a market transitions from bearish to accumulation to bullish, the most hated instruments rally in advance of a turn in higher quality investments.
Bottom Line: If EOS continues to lead on the upside, it seems logical that Ethereum (ETH) and Bitcoin Cash (BCH) could rally vs. Bitcoin (BTC). Looking at ETHBTC in particular, another leg higher in Ethereum (ETH) likely moves Bitcoin (BTC) higher along with it.