اثيريومبيع
ETH Weakness & Bear Market Projection
As I wrote in my last analysis, I have flipped medium-term bearish on crypto. It took a lot of confirmations for me to get here, so it would be hilarious if the market decided to reverse here and make a new high. But regardless, until I see signs of strength, I will generally be posting some speculative projections about where I think the market could be headed next, should the space enter a period of contraction and stagnation. I think there are mounting economic pressures that will cause many firms to deleverage or default over the next year.
The above chart shows where I think ETH can go, should sell pressure continue over the next year. In a long term bullish view, ETH can hold the long term uptrend and bounce somewhere near my "value zone." Those are the prices where I might start to rebuy some Ethereum, depending on how the crypto space looks at that point. I am unsure whether or not current crypto prices can be seen again for a long time, if traditional markets start to truly deleverage.
Some overly hyped coins have already deflated quite significantly. Take a look at LoopRing. Back in November, I speculated about a return to near $1 levels. This is an example of something that was pushed quite heavily on Reddit and social media, due to its plausible connection with GameStop. But even GME price itself didn't go anywhere all of 2021, while buyers waited for a short squeeze that already happened.
Now, Ethereum itself is showing signs of weakness. After breaking down from its bull market uptrend, price has corrected back towards the $3000 level. In doing so, it also broke down from a falling wedge. Over the last few days, it's been retesting the wedge support on low volume. Today, sellers have started to take advantage (as you can see by the higher volume on today's red candle). I do see that funding has been consistently fairly negative for ETH on Binance futures, but I believe trading algos have already caught on to people using negative funding to predict a short squeeze. Here's the current ETH structure, showing that price can still squeeze up towards $3500-3600 and remain in a bearish trend:
The weekly is showing declining buyer volume and rather consistent sell volume. In addition, the 9 week EMA (orange) is much closer to the 50 (red) than it was during the Summer of 2021.You can also observe an "Adam & Eve" top formation, with an initial pointy rejection last summer and a more rounded top forming currently:
Once the 9 week EMA crosses below the 50, I think upside will be pretty severely limited. The MACD is getting extended into the red, showing no signs of slowing selling momentum. On the monthly, Stoch is drifting down towards the bottom, which in the past confirmed the end of the bullish trend.
Additionally, ETH/BTC has not even reached its all-time high from the previous bull market, despite Bitcoin dominance remaining near historically low levels. If ETH/BTC breaks back below this channel, things can get ugly very quickly.
But what about the bullish argument? Sure, we're seeing crypto widely advertised to the public. But in that case, where are the buyers? Sharks like Kevin O'Leary are probably taking profits, benefitting from hype that will take a while to defuse. As shown here, I think if ETH ca break back above that wedge and above the downtrend, it can make a final high by retesting the broken bull market uptrend. Hypothetically, this could be near 6k.
This is not meant as financial advice - this is meant for speculation and entertainment only. For those who are only beginning in crypto, these periods of uncertainty are the most interesting.
-Victor Cobra
The above chart shows where I think ETH can go, should sell pressure continue over the next year. In a long term bullish view, ETH can hold the long term uptrend and bounce somewhere near my "value zone." Those are the prices where I might start to rebuy some Ethereum, depending on how the crypto space looks at that point. I am unsure whether or not current crypto prices can be seen again for a long time, if traditional markets start to truly deleverage.
Some overly hyped coins have already deflated quite significantly. Take a look at LoopRing. Back in November, I speculated about a return to near $1 levels. This is an example of something that was pushed quite heavily on Reddit and social media, due to its plausible connection with GameStop. But even GME price itself didn't go anywhere all of 2021, while buyers waited for a short squeeze that already happened.
Now, Ethereum itself is showing signs of weakness. After breaking down from its bull market uptrend, price has corrected back towards the $3000 level. In doing so, it also broke down from a falling wedge. Over the last few days, it's been retesting the wedge support on low volume. Today, sellers have started to take advantage (as you can see by the higher volume on today's red candle). I do see that funding has been consistently fairly negative for ETH on Binance futures, but I believe trading algos have already caught on to people using negative funding to predict a short squeeze. Here's the current ETH structure, showing that price can still squeeze up towards $3500-3600 and remain in a bearish trend:
The weekly is showing declining buyer volume and rather consistent sell volume. In addition, the 9 week EMA (orange) is much closer to the 50 (red) than it was during the Summer of 2021.You can also observe an "Adam & Eve" top formation, with an initial pointy rejection last summer and a more rounded top forming currently:
Once the 9 week EMA crosses below the 50, I think upside will be pretty severely limited. The MACD is getting extended into the red, showing no signs of slowing selling momentum. On the monthly, Stoch is drifting down towards the bottom, which in the past confirmed the end of the bullish trend.
Additionally, ETH/BTC has not even reached its all-time high from the previous bull market, despite Bitcoin dominance remaining near historically low levels. If ETH/BTC breaks back below this channel, things can get ugly very quickly.
But what about the bullish argument? Sure, we're seeing crypto widely advertised to the public. But in that case, where are the buyers? Sharks like Kevin O'Leary are probably taking profits, benefitting from hype that will take a while to defuse. As shown here, I think if ETH ca break back above that wedge and above the downtrend, it can make a final high by retesting the broken bull market uptrend. Hypothetically, this could be near 6k.
This is not meant as financial advice - this is meant for speculation and entertainment only. For those who are only beginning in crypto, these periods of uncertainty are the most interesting.
-Victor Cobra
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