ETH ecosystem to fund initial stage of crypto bullrun
Updated
When markets rotate the money has to come from somewhere. Money can move in and out of one sector of the economy into the other, like money moving from industrials into technology or from fiat into precious metals. Money can also move around within a macro system from its constituent sub-systems. In the case of crypto, think we will see the Ethereum ecosystem beggared while money flows out of it into other ecosystems.
In order to try and stay ahead of the rotations into and out of crypto and into and out of the various layer one projects within crypto I turn to the best tool I have, which is the charts. Once we have the layer one blockchain we care about we can look at other layer projects that ride on top of the layer one to move up the risk curve for more volatility as we see fit.
ETH/Bitcoin
Bitcoin is the biggest single slice of the crypto by fame and market cap. The double top threat is pretty clear at this point. The black double top appears to be an eve and eve with the difference between the first and second peak about 3.12% That is about as textbook as we could want to see. We just have to start breaking the neckline of the formation and we should start to see more volatility in the pair.
Eth Dominance
ETH.D is likewise in a double top but this one is a bit further away from the neckline. The targeting is much the same. Due to the structures of the uptrend I think that 40% draw down is very reasonable and realistic.
XRPETH
XRP appears to be in a ascending triangle against ETH with a target close to 2x if full performance is reached.
Solana/ETH
Solana is suppose to be an Ethereum killer and in the long run I think it will live up to its name. I think it has a couple of years for the ecosystem to mature before It does. A major sign of strength will be if this W pattern performs to target. That would have Sol putting up over twice the gains than eth does in the initial stages of this move.
Polkadot ETH
Dot has been moving sideway for the last 4 months and has created some bullish divergence on the weekly chart. I think we will see it slowly erode share out of eth.
Kadena Eth
One of my favorite layer ones to watch and maybe trade before I see my long term set up is Kadena. It is poised ot have a W pattern that pops it over 100% against eth.
Cronos Eth
Cro seems to be another coin in a wedge against eth. The target this cycle is over 300% away from the current level.
ADA ETH
Oh, look, it is another coin in a bullish falling wedge against ETH. Sure reaching the previous ATH might take a decade or so, but that is a decade to favor ADA over eth.
Doge Meme Coin Versus Eth
Want to consider something that at first glance seem moronic or hilarious? Doge has the structure to 70x eth over the next couple of years.
Final thoughts
The Eth team has done a lot to make their system more affordable to use. As price goes down the ease of use goes up and the adoption goes up. Ethereum is in the process of turning itself into a volume trade and not a profit margin trade. That might be a good thing for cryptocurrency as a whole but I am chasing alpha. Crypto gives me more potential alpha than equities so I play here. If the alpha is leaving eth then I am going to leave as well, no matter how good it could be for the world or the ecosystem. Daddy can't pay for his girls food and clothes if he doesn't get that alpha.
In order to try and stay ahead of the rotations into and out of crypto and into and out of the various layer one projects within crypto I turn to the best tool I have, which is the charts. Once we have the layer one blockchain we care about we can look at other layer projects that ride on top of the layer one to move up the risk curve for more volatility as we see fit.
ETH/Bitcoin
Bitcoin is the biggest single slice of the crypto by fame and market cap. The double top threat is pretty clear at this point. The black double top appears to be an eve and eve with the difference between the first and second peak about 3.12% That is about as textbook as we could want to see. We just have to start breaking the neckline of the formation and we should start to see more volatility in the pair.
Eth Dominance
ETH.D is likewise in a double top but this one is a bit further away from the neckline. The targeting is much the same. Due to the structures of the uptrend I think that 40% draw down is very reasonable and realistic.
XRPETH
XRP appears to be in a ascending triangle against ETH with a target close to 2x if full performance is reached.
Solana/ETH
Solana is suppose to be an Ethereum killer and in the long run I think it will live up to its name. I think it has a couple of years for the ecosystem to mature before It does. A major sign of strength will be if this W pattern performs to target. That would have Sol putting up over twice the gains than eth does in the initial stages of this move.
Polkadot ETH
Dot has been moving sideway for the last 4 months and has created some bullish divergence on the weekly chart. I think we will see it slowly erode share out of eth.
Kadena Eth
One of my favorite layer ones to watch and maybe trade before I see my long term set up is Kadena. It is poised ot have a W pattern that pops it over 100% against eth.
Cronos Eth
Cro seems to be another coin in a wedge against eth. The target this cycle is over 300% away from the current level.
ADA ETH
Oh, look, it is another coin in a bullish falling wedge against ETH. Sure reaching the previous ATH might take a decade or so, but that is a decade to favor ADA over eth.
Doge Meme Coin Versus Eth
Want to consider something that at first glance seem moronic or hilarious? Doge has the structure to 70x eth over the next couple of years.
Final thoughts
The Eth team has done a lot to make their system more affordable to use. As price goes down the ease of use goes up and the adoption goes up. Ethereum is in the process of turning itself into a volume trade and not a profit margin trade. That might be a good thing for cryptocurrency as a whole but I am chasing alpha. Crypto gives me more potential alpha than equities so I play here. If the alpha is leaving eth then I am going to leave as well, no matter how good it could be for the world or the ecosystem. Daddy can't pay for his girls food and clothes if he doesn't get that alpha.
Note
It seems we have had the monthly MACD cross I have been waiting so long for. Officially the long term trend has been sideways, and sideways is part of reversal.Eth.d is looking just a bit better but I remain certain that MACD crossing zero is a very high probability scenario.
Note
Eth/BTC is minutes way from having its lowest daily close on about 180 days. That is pretty bad in itself. Even worse is that it is having its intra-week chart (the three day) close at its lowest level in 321 days. We dont see a long wick indicating people are buying this low.This lower timeframe candle analysis backs up a dreary monthly chart. We still have about 10 days left in the month but as I have point out before the monthly MACD has crossed zero. The ADX D- is above the D+. We are on the verge of having price fall below a red ichimoku cloud with a bearish T-L cross.
Our long term indicators are very bearish. Hella bearish you might say if you spent too much time in Cali.
I still suspect this will have wide-spread implications for the Ethereum ecosystem as a whole with a lot of negative price action for Ethereum. I have stayed away from the ETH ecosystem and looked at projects on other layer 1 blockchains. I will continue to do so until some ethbtc downside targets are met.
Note
I continue to be dreary on ETHUSD and biased towards altcoins that look bullish against eth. The chart below shows what I see happening on ETH, which is a massive bull trap. The most logical place I could find this formation to fall is the rise of the purple W bottom. We are talking around $300 per eth.tradingview.com/x/NvizijJP/.
This whole move is net neutral for crypto as a whole, just money moving around the crypto ecosystem.
Note
The technical situation ETHBTC faces continues to get increasingly bearish. The guassian channel has acted as resistance as price retests the neckline of the head and shoulders and the Stoch is poised to go "coast to coast" the same as it did in the 2019 ehtbtc bear market.Note
Things continue to look awful for ETHTC. We still have 12 days to go before the close but on the monthly chart it seems pretty clear that the 50w SMA bas been effective as resistance. There has been a lot of wicks above it and now it seems the 10 and 50 are about to cross bearishly. The last time this happened was in 2018 and we had another year of ETHBTC bear market and over 60% decline.The chat on ETHUSD continues to look absolutely awful. I know some people are quite bullish on ETH but at this point it is a dinosaur in crypto compared to the new evolutions.
We will see what the last 12 days of the month bring but I don't think it will negate what we see now.
Note
ETHBTC double top contineus to be a slow moving trainwreck. After many months we finally see a whole candle beneath the neckline The on the D-/D+ we can clearly see the D- has been above the D+ since last September but now the jaws are opening bearish as the D+ fals and the D- increases at an increasing rate.
ETHUSD looks like it will finally start to fall out of its rising wedge. It is clearly setting lower high from the ATH a couple of years ago and the D-/D+ looks like the jaws are going to close bearishly on this uptrend. The bearish MACD cross also looks to be incoming. I am going to continue to be generally bearish on anything within the ETH ecosystem as money gets squeezed and rotated out.
I think this will be a time we see BTC and ETH run separate directions. BTC is consolidating at an all-time high after a halvening above the MACD EMAs. This has been bullish every time before it has happened, and I assume it will be bullish this time.
Trade active
Eth Continues to be brutalized by BTC. The pair continues its way to the double top target of 2.0. We see a slight bounce occurred at the 1.618 level but that just resulted in a long wick. The log MACD continues to undulate below zero and we seen no attempt of price to try and mount the 12 EMA that would begin the consolidation for a MACD-Signal cross much less the MACD getting above zero.
Absolutely brutal for Eth holders.
GG
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.