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Wednesday, September 2, 2020

ETH/USD Macro

ETH/USD Macro

ETH / USD KRAKEN:ETHUSD

Ethereum's local top was undoubtedly a 5th wave of something, but the question remains: of what? Zooming out and comparing Bitcoin's Macro to Ethereum's, the shape of the two are remarkably consistent. However, a fairly decent case can be made that Bitcoin has entered a bull market and is impulsive to the upside. But, in my opinion, it is far more difficult to make that same argument for Ethereum . Regardless, Ethereum will follow Bitcoin - if Bitcoin goes up, Ethereum will follow. And these markets are not required to follow EW.

The most obvious difference is Ethereum's poor performance last year in comparison to Bitcoin . As a result, if you were to measure Bitcoin as impulsive, you'd get something like this:

snapshot

On the other hand, if you were to measure Ethereum the same way, you'd get something far less convincing:

snapshot

As they currently measure, ETH did not push high enough to qualify as a breakout and its sell off from July until March did not push deep enough to qualify as a completed correction. Instead, it retraced 90% of the initial push up, measuring perfectly as a Flat correction . In short, it's not possible to see Ethereum as anything other than corrective without ignoring the combination of the last two years. Everything measures out perfectly to be a fundamentally sound correction. But that does not mean that upside is finished, it is very likely that we will see significantly higher prices for Ethereum before all is said and done - I just don't think it's possible to visit All Time Highs again without another heinous rip to the downside.

snapshot

Assuming that we haven't topped out already, which we more than likely have not, Ethereum has room to make a run for anything from $500 to even as high as $850 and still remain corrective. That sounds pretty crazy to say but that's just the nature of corrections in Crypto - they get extremely extended. If we continue higher, the first area I will be watching is the .618 - 1.236 at $500 - $580.
(I had incorrectly stated in my last post that Ethereum had rejected from the .618. The measurements on every exchange vary. On Kraken, it is $508. On Coinbase, it is $474. I had to use Kraken for this analysis because Coinbase does not have the data going back to 2015.)

If broken, Ethereum has one last critical level to break at the .786 before taking another shot at its ATH . The only way I can see us getting back up there and breaking Bullish out of this is one way: manipulation. There is zero indication that Ethereum , structurally or fundamentally, should break bullish out of this. It sounds counterintuitive, but without ignoring any of the data from 2017 until now, it would be fundamentally more bullish for ETH to have one final push to $40 - $90 before trying to reach higher. If ETH were to do that, I would say $3k - $5k are not unreasonable targets.

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