btc_joe
Short

The rise and fall of ETH Part 2...Ltc style 1-2 yr bear market?

POLONIEX:ETHBTC   Ethereum / Bitcoin
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I have a lot more analysis to add, will do so within the next 24 hours, but just wanted to get this out there.
Kommentar: 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.
Kommentar: 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.
Kommentar: 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.
Kommentar: 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.
Kommentar: Another high in price, but another lower high RSI (3rd lower high in a row) and another lower high in volume (bearish divergence).
Kommentar: 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.
Kommentar: Okay, finally a real nice sell off:

Some hidden bull divergence suggests we could get a bit of up now for a nice right shoulder before we go lower:
Kommentar: Looks like a head and shoulders is about to complete:
Kommentar: pretty much spot on so far:
Kommentar: People calling for bottom, I still think there is more downside pretty much going as expected:
Kommentar: Nope, morning star has formed on the daily chart it looks like the 50 fib will hold price going up it seems
Kommentar: 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.
Kommentar: Not great news:
https://twitter.com/mikejcasey/status/896118496647462912
That may be all the up we get for ETH and are at heading back to the red dottted trendline:
Kommentar: 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.
Kommentar: Bitcoin looks weak, looks like scenario a (up for the right shoulder):
Kommentar: 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:
Kommentar: 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.
Kommentar:
Kommentar: Ruh roh: https://twitter.com/coindesk/status/904686846009114625

Daily RSI breaking support line again:
Kommentar: Price was saved for today by this:
https://twitter.com/CarpeNoctom/status/905483478514499590

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 : )
Kommentar: According to Barry Silbert, this silly proposal was already rejected today LOL

RIP
Kommentar: 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:
Kommentar:
Kommentar: The end is near:
Kommentar: Testing the red dotted trendline now...if it breaks say bye-bye : )
Kommentar: Not much has changed, price below all support. Soon we go from "why isn't going up" to "hmm how low will it go"
Kommentar:
Kommentar: Sorry guys, I know I'm an ETH hater lol but the chart is bearish. No reason to believe otherwise, at least not yet:
Kommentar:
Kommentar: Another bearish rising wedge forming:
Kommentar: 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:
Kommentar: Time for the dead cat bounce?
Kommentar: Dead cat bounce complete? Time to head back to down...
Kommentar: 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 : )
Kommentar: Dead cat bounce here as well : ) Following the doodle beautifully. Just going up to make former support resistance IMO
Kommentar: That should do it : )
Kommentar:
Kommentar: (see how the consolidation breaks)
Kommentar: Also, it looks like the same head and shoulders pattern that has already broken down on ltc...
Kommentar: Price fell out of channel looks liek the downtrend continues...
Kommentar: My doodle game is too good, price seems like it wants to follow the doodle back up:
Kommentar: wow not even dev con hype could get a dead cat. Oh well, doodle finally wrong : ) downtrend resumes...
Kommentar: 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!
Trade wurde manuell geschlossen: Local bottom found, alts about to explode. Staying away from ETH for now. thanks for following : )
still no movement... :/ 48 hr 48 min till devcon3 \o/
Antworten
Very nice, interestingly I believe btc will hit 6.8k and eth will hit 0.045 (maybe 0.04) and then we'll see a bounce up...its mimicing the otherside of this chart
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Will this hit 0.06 before heading down?
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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.
+1 Antworten
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.
+1 Antworten
btc_joe subzer0
@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.
+1 Antworten
What do you think the latest SEC news you posted will do to the price? Still on track for the "end"?
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btc_joe DGenowa
@DGenowa, Definitely not good news. Still on track, if anything this will add a bit of fuel to the fire.
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Hmmm. Looks like your charts are starting to change my mind. BTC rally will stall around $6800 so the best ether can hope for is 0.12 which would be about $800. After that, I can see ETH and BTC falling together, but with ETH falling at a faster rate. We will see.
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fortunekr fortunekr
I would also add that after BTC's big correction, the bull will resume with huge ferocity. You probably want to be out of all alts when this happens. These a ton of geopolitical shitstorms coming this way fall/winter 2017. BTC at $10,000 is a piece of cake.
Antworten
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