The Importance Of Ethereum
2022.08.26 11:05
I think everyone here is pretty much clear on the thesis that crypto is representative of the animal spirits of the investment world, and following crypto is pretty much the only way to monitor these spirits 365 days a year, 24 hours a day. I think Ethereum in particular is a valuable gauge, so let’s take a fresh look as to where it is at:
ETH Price Chart
The long-term chart above shows the same rainbow analog that has been in place for a very long time, and if this analog holds, it certainly suggests much lower prices ahead. The key, however, is two particular failure points, as can be seen more easily with this closer-in look:
ETH Price Chart
Those two points being, first, the dashed red line and, second, the ascending trendline. These are both quite close in price, so if one breaks, the other one will likely break as well.
The prospect for this drop is increased, I believe, if we look at Ethereum in normalized money terms—that is, as a ratio chart of ETH divided by the Federal Reserve’s reported money supply. In this ratio chart, the breakout has massively failed, and there is, in fact, a beautifully-crafted head and shoulders topping pattern above the horizontal line.
ETH:FR Chart
The overall c conclusion being: Ethereum is going to fall hard in the coming weeks and months, and stocks will tag right along.
