Investors seem to be waking up to the upside potential in Ethereum (ETH).

We think there are two things driving this. The first is simple visuals. If an investor missed out on Bitcoin (BTC), Ethereum (ETH) has a low dollar price relative to Bitcoin (BTC). The fact that $600 can buy two Ether may give Ethereum (ETH) a unit bias boost in the eyes of retail investors. It sounds silly, but it happens all the time in stocks. That is why sometimes stocks that are high priced split two for one. It’s psychologically easier to buy one unit of something for $300 than buy a partial unit of something that trades at $9,000.

The second thing that is driving Ethereum (ETH) is chart signals. Charts show that a breakout from Ethereum’s (ETH) 10-month range is possible.

If you look at ETHBTC (Ethereum vs. Bitcoin), ETHBTC is moving up after a retesting an important trend line (Figure 1). This could signal a long term breakout in which Ethereum (ETH) could start outperforming Bitcoin (BTC) on the upside.

 Figure 1

Looking at our Livermore construct in Ethereum (ETH), it looks like Ethereum (ETH) has a lot more upside and can extend to $350 and then $400 (Figure 2).  Gann work hints that a really big inflection point is coming in Ethereum (ETH) in the next two days (not shown). This could imply that a big reach higher is possible.

 Figure 2

Finally, there is another signal that might benefit Ethereum (ETH). A statistic called Bitcoin (BTC) Dominance seems to be rolling over after making a clear five wave top (Figure 3). Said plainly, this chart implies that both big coins and alts can make big percentage moves to the upside relative to Bitcoin (BTC). For example, if Bitcoin (BTC) rallies 5%, Ethereum (ETH) may rally 15% and other alts could rally 40%.

 Figure 3

Bottom Line: Retail investors are coming. Alts are bottoming. Equities are floundering, and crypto is the only bullish game in town. In our view, the crypto universe is heading for a parabolic move up — and that’s only just beginning.

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