I have a lot more analysis to add, will do so within the next 24 hours, but just wanted to get this out there.
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For some reason I can not add this all in one update, so i'll have to split it up into a few, here is my extensive analysis:
Extensive analysis:
Sentiment is euphoric for this young, immature technology, and the dumb money seems to think ETH can just rise forever. ETH is now worth around half of the market cap of bitcoin. People read that and probably think “oh okay” …that is astonishing. Bitcoin has been around and working reliably for over 8 years with a large attackable bounty that has never been stolen. We know it works. I mean, its almost silly to compare btc and eth as one of these aims to be money, is digital gold, and one of these (as admitted by its developers) does not aim to be. Further, there is no cap on the supply of ETH. Many of my friends have contacted me about ETH because they simply see the hype, and want to buy in, this is called the dumb money. If i said the words “smart contract” they would have absolutely no idea what I was talking about, let alone “the DAO” or “recursive loop function” …these are the types of people who have fueled this truly astonishing rally in recent weeks. If you rode this bull, I commend you, but its time to take your profits in my opinion.
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ICOs A *huge part of the demand for ETH is based on these ICOs. 90-99% of them are complete garbage and will fail. It makes no sense to give these people all the money up front, there is no incentive to follow through thereafter. But lets assume the incentives were right, and there was a good amount of substance in these companies/ideas *right now. Okay, well then we get the fact that just like the DAO these are all code that if not properly implemented, can be hacked. And as Andreas recently touched upon in one of his videos, these should be tested with 10k and gradually increased after long amounts of time of proving they work. As opposed to the millions, or tens of millions that are being thrown at them in a matter of minutes, or seconds. Its ridiculous. These are now huge bounties for hackers. But okay, lets assume there is no major hacks. The biggest point of all, is that, if it looks like a security, walks like a security, and talks like a security…ITS A SECURITY! And to the SEC especially, they are a hammer, and everything is a nail. I’m honestly astonished they have not taken action yet, it seems destine to me. I just saw yesterday that the PBOC is planning to regulate ICOs, dk much about it but certainly not a good thing. Long story short, there is a truly epic bubble in ICO’s, and when it pops, these ICOs will inevitably be sold for Ether which will create an enormous amount of ether available for sale, that will be sold for bitcoin or fiat. The same way people bought ether to buy ICOs they will sell it right back.
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POS ETH will be eventually switching to the totally unproven mining algo POS. POS is literally an “open technical question” as Balaji S. put it. I have no faith in POS, it is a garbage mining algo and its hard to believe that the wheel has been reinvented. And if it is to succeed, it will take a lot of attacks and time to prove that it can work. I am not up on every detail with ETH, I have heard they may not switch to POS, or they may delay, and IMO it really does not matter, they are damned if they do, damned if they don’t. Why? Well if they do they are damned for the reasons above, if they don’t, it would honestly be quite funny as they would essentially be admitting they are simply a more expensive to use ETC. Which brings me to my next point, there is competition from ETC (on the rise) and the soon to be created RSK. Definitely not a good thing you may be able to do literally all the same stuff on these new technologies, so why exactly is ETH worth so many multiples of them and half of bitcoins marketcap with an unlimited supply? Its like the joke of the century.
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ETH is still a very, very new technology. Security and trust do not happen overnight, sure speculation may ignore that for stretches, but it does so at its own peril. Eventually reality always hits us on the head. ETH has yet to have a prolonged bear market as all other alts have, and bitcoin itself! It is not immune to such things, and we now have a new generation of bag holders, I could be wrong, but I believe ETH is in for a litecoin (2014-2016) style bear market. I believe it will go the low .03’s and really there is very strong support at .015 so I could see it going that low. While I keep an eye on /fiat prices of alts, they are not as important to me as there’s always an opportunity cost. Bitcoin is just getting started, and the reasons its rising are (in large part) due to geo-politicial-economic reasons—bitcoin is digital gold. Alts do not go up for these reasons, if only, they do transitively through the wealth created in bitcoin. ETH especially, as an unlimited supply alt, has no business thriving in this type of environment.
Anyway, those are basically my thoughts, I hope I do not offend, it is not my intention. I could be wrong, make up your own mind. Good luck.
Another high in price, but another lower high RSI (3rd lower high in a row) and another lower high in volume (bearish divergence).
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And of course its possible i'm totally wrong and this could just stay irrational for a very long time, but objectively looking at the chart, this looks like it should reverse soon to me.
People calling for bottom, I still think there is more downside pretty much going as expected:
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Nope, morning star has formed on the daily chart it looks like the 50 fib will hold price going up it seems
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Cleaned up the chart a bit, removed the old arrows, extended the blue neckline. Price should at least make it up to the blue neckline, but I think the most likely scenario is this rise is really just the building of a right shoulder of an even bigger head and shoulders reversal pattern. good luck.
Price made it all the way down to the red dotted trendline as expected : ) What now? Tough to say, two most likely scenarios are:
a. price consolidates for a bit and then starts to make its way back up to form a big right shoulder before completing the pattern, breaking the neckline and going much lower.
b. price simply continues on down, breaks major support from the red trendline/.618 fib purple line and the panic selling begins.
The destination is the same IMO. We should probably be able to tell which of these two scenarios is coming by the end of the week based on how this weekly candle turns out.
Gluck.
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Bitcoin looks weak, looks like scenario a (up for the right shoulder):
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Price did reverse on the last update, but failed to sustain.
Lots of bad news this week for ICO's and regulations, and breaking below support, looks like the downtrend continues. Last hope is the red dotted line but if it couldn't get enough umph for the right shoulder now, I wouldn't bet on that holding:
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To clarify, I do think the overall downtrend continues here (may be confusing because I did not remove the arrows from the last chart). The up we had may be enough to qualify for a right shoulder in it of itself. And this looks like a big 5-3-5 typical abc correction where we had the 5 waves down for a, and just completed the 3 waves up for b, and now we should get 5 waves down for c. Will try to clean it up and give a chart that shows this if i can.
Pretty ridiculous to think the SEC would ever actually approve an ETH ETF before it approved a BTC ETF so kind of silly. Anyway, not much has changed, but have to acknowledge the possibility that the ETH kool-aid pumpers could push this up for a right shoulder up to the blue trendline (and a bigger wave b then expected). I'm still sticking with the chart though until the price breaks back above the purple 50 fib and ultimately yellow trendline I added: Since the daily rsi bounced at the green trendline the possibility remains for that upswing to later get shut down by the descending light blue trendline, but again I don't think thats likely. Either way the final destination is lower : )
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According to Barry Silbert, this silly proposal was already rejected today LOL
RIP
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Not much happening here...ETH HF at the end of the month. The dump is coming...sooner or later. If later than it mean the price enters into the yellow triangle territory to keep hope alive for the faithful until we get closer:
Not much has changed, price below all support. Soon we go from "why isn't going up" to "hmm how low will it go"
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Sorry guys, I know I'm an ETH hater lol but the chart is bearish. No reason to believe otherwise, at least not yet:
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Another bearish rising wedge forming:
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Fell out of the rising wedge nicely. Some bullish divergence here in volume and rsi like all other alts, so could bounce here but will probably be short-lived:
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Time for the dead cat bounce?
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Dead cat bounce complete? Time to head back to down...
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Price fell lower as expected, wouldn't be surprised if this goes sideways up (could test resistance once more) for a bit before falling, but either way the destination is the same : )
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Dead cat bounce here as well : ) Following the doodle beautifully. Just going up to make former support resistance IMO
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That should do it : )
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(see how the consolidation breaks)
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Also, it looks like the same head and shoulders pattern that has already broken down on ltc...
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Price fell out of channel looks liek the downtrend continues...
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My doodle game is too good, price seems like it wants to follow the doodle back up:
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wow not even dev con hype could get a dead cat. Oh well, doodle finally wrong : ) downtrend resumes...
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In case you hadn't heard, critical Parity bug leaves $150 million in ETH frozen, HF potentially needed. I'm starting to love my bitcoin pocket calculator!
手動結束交易
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Local bottom found, alts about to explode. Staying away from ETH for now. thanks for following : )
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timedimpulse_tradingsystems
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Good analysis. Pretty spot on. Agree it is still immature tech not some "global computer"
IvanLabrie
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Great work here. The bear case was well detailed, and sustained with evidence, it just was tricky to spot it but you did a great job.
subzer0
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mate eth will be higher end of the year. youve made good analysis on btc and ltc, but on eth, you seem a little biased for a longer time. However keep up your work.
ltc-joe
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@subzer0, haha I definitely have an ETH bias agreed but this chart has been working out excellent thus far, and it seems clear to me we are going lower. Price is below all support (except horizontal support that has been tested 6 times already. In my view that is chipping away at ice that will inevitably break, a test and retest of support is healthy, not 6 tests. Also, beautiful EW structure--we had wave a down, then we had a sideways abcde triangle for wave b, and now we are going to go down for wave c. Until the market starts to tell me i'm wrong, i'm sticking with it. A daily close above .075 (really .08 to be me more sure) and i'll be right there with you and get bullish, seems unlikely though. Thanks for your comment.
majic92
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hi good FA i think also eth doesn't compare at e-currency like btc because it isn't and what hurts Bitcoin will hurts eth also "the fees" (gaz) but isn't just that, it is also for a many thing you have explain, but i dont think etc can replace eth, because eth dont need etc but etc is in shadow of eth, so if eth do something foolish or if vitalik die maybe etc can replace it but the 2 are too similar and etc is than the abandoned chain of eth, but etc seems good however (may more than eth) but it suffer of be a clone of eth.
metamorphosis11
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Joe, I think there's one huge factor you left out here. What happens when many people want to hedge their bitcoin when it's time for UASF date? Will they convert to fiat, or will they hedge within crypto?
If they hedge within crypto, LTC & ETH seem to be obvious hedges. Obviously many other alts could benefit as well.
The other outcome is that the whole space sees a bear market.
What are your thoughts on the potential Bitcoin fork in the near future? If it does fork into two chains, the argument for limited supply of BTC goes out the window.
ltc-joe
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@metamorphosis11, yes, the UASF is definitely a wild card for bitcoin and all of crypto. I'm definitely uber bullish on ltc as i've shown in my charts. Sure I could see hedging into alts, you can also argue that has already been happening for months--with BU, the NY agreement, UASF coming, etc it has seemed for a while btc has been at risk of a split. That risk exists, and is scary, but at the end of the day I don't think it will happen outside of a temporary split that will eventually be reorg'd. Yes they can than hf, but I think and hope that is probably a bluff. If there was a permanent split I don't think that would be good for btc, and is even more damaging than with ETH as btc is digital gold, but i'm ns I would go so far to say limited supply goes out the window. Anyway, if the hedging into alts is not already fully priced in, I would say ETH and XRP would benefit the least with their current extremely high valuations, as opposed to an LTC which is a measly 1-2 billion right now (measly in comparison). Could be wrong. Thats my take.
simio
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@btc_joe, surly it's a win win situation to hold btc moreover Alts right ? ....If theirs no split btc will explode and causing a panic sell epidemic, and if their is a split we get free btc
fortunekr
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I love your charts btc_joe and I think you have the most consistent record on tradingview but on this one I think you are wrong. First of all, the webbot says that ETH is ultra bullish. Who could argue against the webbot? There have been some spectacular predictions 'on the money' in clif's reports. Second, the media are increasingly mentioning ETH in the same breath as BTC. We could argue about why that is but what would be the point? The net effect being that in the eyes of investors around the world ETH has legitimacy. Third, I agree that dumb money doesn't give a f##k about the fundamentals. But you also have to take in consideration that we will soon enter a time where people will be running from fiat as fast as they can because of financial crises. People would happily swap worthless fiat for any scraps of ETH they could find, even if it was insanely overbought. Although I think BTC would benefit the most in this environment. It pains me to say this, but this turd is going to the moon. Well at least of the next couple of years. After that, who knows? As the old saying goes, don't fight the tape. It's an evil POS but what can you do?
ltc-joe
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@fortunekr, the key thing here is this is an eth/btc chart...its possible, but to say this is going much higher is almost saying eth is about to replace btc. For instance, ETH can go to $300 and this chart could still drop significantly.