Exhaustion of $BTC and $ETH
(Edit on 30/01/2022): This article was mainly written on the 20th of Januari. As my overview of 2022 in crypto is quite optimistic, I felt like some parts had to have priority over other subjects due to possible narratives that can play out and that are present and important at that time. Now that I have a better overview of how I want to approach the overview of 2022, it will be possible to get a bit more structuring going on. In addition, it will be fun to see how the exhaustion of Bitcoin ($BTC) and Ethereum ($ETH) has developed. All parts that are written today (30th of Januari 2022) will be marked with an edit such as above on this paragraph.
Exhaustion of Bitcoin ($BTC) and Ethereum ($ETH) (20/01/2022)
(Edit on 20/01/2022): The market has been kind of boring last couple of months, atleast regarding larger caps such as Bitcoin and Ethereum and I think many of you will agree. Below the chart of BTC and ETH are presented.
(Edit on 20/01/2022): As Cobie has pointed out in this tweetstorm low conviction-money enters super late. This motivates to only bid on “new projects” since they did not have the balls to bid on $ETH or $BTC a couple years ago. They will perceive it as -EV (Negative Expected Value) in comparison to other new stuff that comes out, neglecting the risk, since they think if ETH and BTC survives, other stuff can also survive and we can cash a big fat multiple! This causes the interest of existing coins to be fractured throughout all the new dopamine coins and changing narratives that launch for these VC’s, funds and retail. Part of this is, in my opinion, due to the barriers between ecosystems and layer 1’s that are diminishing. People can transfer or participate easier and without a huge hassle nowadays through EVM-chains and other Cross-chain bridges. You are less isolated with your positions most of the time. In addition, the market and technology innovation that are happening of derivatives of assets are in a really fast pace since 2021. This will transition in my next subject which is the multichain era. This fractured market and other projects building out protocols for a multichain era is not beneficial for bitcoin and ethereum in the way that attention is projected elsewhere. I don’t see them pumping anytime soon, but rather chop-chop range further for Q1 and Q2. Only when the diagonal trendline on $BTC will be closed with a fat green candle will I become cautiously optimistic. The only catalyst that can boost BTC and ETH out to new all-time-highs is the ETH 2.0 release. A narrative of The Flippening will be initiated which will rally both crypto’s and a story where the community can rally behind again.
Exhaustion of Bitcoin ($BTC) and Ethereum ($ETH) (30/01/2022)
(Edit on 30/01/2022): Let’s first take a look at the chart so we can compare them with the charts above that were taken on the 20th of Januari.
(Edit on 30/01/2022):As said earlier we would like to have a big green candle upwards through the diagonal trendline to become cautiously optimistic. Until then I will hold the opinion of the trend = your friend. Also, with all the mayhem going on in DeFi, sentiment has taken a hit. Eventhough there is some macro bullish stuff happening with Bitcoin last week. I also think we will see other countries following El Salvador’s approach of making Bitcoin legal tender and not only states will try to adopt it. But until that will come to fruition we will have to assume we might see $30k as first major support. I do however think we will chop sideways to that level over the course of maybe a few weeks. Will have to check how the chart looks like when we might have an impulse move upwards towards the $40k area and watch levels as we might approach $30k. I will become optimistic when we can reclaim the level around $53k.
(Edit on 30/01/2022): Let’s see how the $ETH chart looks like since the 20th of januari.
(Edit on 30/01/2022): Just as with $BTC the $ETH chart is still downtrending from mid Q3. As long as the downward diagonal isn’t broken with a juicy green candle, we will have to assume lower highs. For Ethereum the important level to hold will be somewhere between $1700-$2000. I will become cautiously optimistic when we can break the diagonal trendline. To become optimistic I would like to see $ETH reclaim the $3.3k level as new support again.
(Edit on 30/01/2022): Everything is in probabilities. With these methods (FA/TA) I use, I try to enhance my ability to spot which way the probability sides with. Is it instead of a coinflip (50/50), maybe a 60/40 or even an 80/20? No one, including me, knows for sure what will happen, but maybe I can increase my odds by doing it this way.
DISCLAIMER: I’m just a guy that likes to research and write about it. I am invested in some of the coins I write about. Not Financial Advise. Only invest what you can lose.