It’s Now Or Never For Ethereum - Crypto Piece
Fuel For One Last Push?
We believe that Bitcoin is in the process of forming its mid-cycle top as highlighted in our last Crypto Piece. However, that doesn’t it’s all downside in the near-term for all of crypto, at least not yet. Ethereum relative to Bitcoin has shown sign of significant strength from the value zone. Last week’s candle was able to close above the downtrend, but is having a tricky time at the 0.0596 level we’ve highlighted on multiple occasions.
Ethereum is currently near support around $2500. That region (with a minimum of $2375) is a must hold region to prevent further correction. On the upside, the $2975 region looks attractive for one last push up before a more meaningful correction. However, the next section shows how this would depend on Bitcoin’s topping pattern.
Bitcoin, Please Be Kind
Ethereum’s next move depends on the type of topping pattern that Bitcoin puts in. IF Bitcoin decides to continue its downside without any retracements then it’s game over for the rest of the crypto market in the near term.
However, IF Bitcoin puts in a topping pattern while retracing, similar to 2017/2018 top, then Ethereum and some altcoins still have one more push up left. Back then, Bitcoin made its top in Dec 2017. However, during its topping pattern that followed, Ethereum was able to see one more leg up before eventually joining Bitcoin in the correction.
Please note that we’re NOT calling for a major top in Bitcoin (like 2017/2018 ended up being), but a mid-cycle top that leads to a meaningful correction and then further upside.
This time around, Bitcoin has likely put in a mid-cycle top during the Bitcoin ETF announcement. However, the question is if a similar topping pattern is in the works that will allow Ethereum to reach the $2975 level before ETH joins BTC in its correction. We believe that such a development is very probable as far as Bitcoin holds the $40k level on a closing basis. Close below that and we’re going to be switching our bias with the invalidation level being triggered. Remember, it’s our job to play what the market gives, not what we want it to give.
Ethereum Cycle Forecast
Ethereum’s Cycle Forecast using our “Secret Sauce” (blue line), Energy Cycle (pink line), and Seasonal Cycle (green line) also shows upside until 28th February, albeit in a choppy fashion. While such forecasts are only saved for our paid members, we wanted to provide everyone with a sense for what the Cycle Forecasts look like. This provides further confluence to the idea laid out above.
Please note that Founding Members receive ALL our updated Quarterly Cycle Forecasts for Indexes, Sectors, Cryptos (including multiple altcoins), Commodities, and The Magnificent 7 sent out via email a few weeks before the beginning of each quarter. This is a must have product for those looking to find a timing edge in the market and be prepared for sharp drawdowns and big run ups. Consider upgrading your membership to the Founding Member plan. We have more benefits in the works for this membership
Bitcoin Dominance – Not The Same As Before
Another important chart to note is the Bitcoin dominance one, which a lot of people use to anticipate if Bitcoin will outperform or underperform. There are a lot of traders who are still expecting Bitcoin dominance to reach at least 57.33% resistance if not the stronger resistance zone between 60.75% to 62.85%. However, we hold a different view because these traders are missing a VERY key point in their analysis.
