Technicals
BYBIT:ETHUSD has had a very rough day. Smashing through demand at 1871 towards max pain at 1681 where shorts began to cover and the market bottomed out. Recovering 140 points off its low in 15 minutes there is clearly still demand in the market. Failure to hold 1781 through next week could spell more trouble for this market globally there has been a massive rush to cash. I anticipate that the area market demand zone will hold as a support for the next month until there is more clarity on direction in equities. Not a lot has changed from a technical standpoint but such a drastic swing creates new contingencies for the coming months. The speed of the market easing off this low at 1681 will give confluence for expectations due to the fact that crypto has been so momentum driven for the past month and a half. Realistically if the market sells back below 1781- 1681 a test of 1231 is likely. However, If ETHUSD can hold this swing low created today, theres a chance we see some price taking back toward its yearly point of control. This is still a bear market for cryptos. It has been 6 months and there hasn't been a new high so overhead supply is going to be a huge issue for the bulls. The first major test of overhead would be Aprils high around 3542-3375, this is where crypto began its slow decoupling from equities. This zone also had little to no acceptance in the past so I expect some profit taking before continuation. Cracking above that resistance is great for the bulls. Moves back above 4000 would have a higher probability and price holding above 4241 could quickly establish the end of the bear market and move into new all time highs. Bull case through the end of the year, we test 4000, maybe test 4400 once if there is strength on a break 4241.
Fundamentals
Whales have felt the pain. Large holders and investors have heavily bought this dip the whole way down and a lot big names are underwater on their investment. Retail has probably been hit worse. Crypto's popularity which can be tracked by google analytics and sign up metrics for brokers shows that 2021 was the biggest year Crypto markets have ever seen. The retail consensus is that we are early and while there is some truth to that but the price of crypto currency has developed a lot quicker than the technology. Throughout the year lots of cash grab have garnered attention with FOMO and buzz words driving flows and taken away the spotlight from developments that have a lot of promise. The idea of decentralization has promise, people are ready to invest, and there is some real world application. That being said, the money has to flow into the right pockets for crypto to develop at the rate its pricing. Another big issue has been an influx of hackers on crypto websites and even within ecosystems. This is a major turnoff for institutions who invest in millions/billions. The community surrounding crypto is resilient from what I seen but a lot of the execution has been poor. As countries continue to adopt Bitcoin and other cryptos as payment methods the market will begin to balance and the pressure of XYZ selling their crypto will dissipate. Furthermore, developments in crypto niche markets like finance, gaming, and DAO's will continue to attract new players. Right now mechanisms are solid, the technology works, but the compensation for developers isn't all the way there. I remain bullish on the prospect of crypto becoming a part of the global economy in some way but from that standpoint we are still in early stages without much clarity from the ECB & Fed.
BYBIT:ETHUSD has had a very rough day. Smashing through demand at 1871 towards max pain at 1681 where shorts began to cover and the market bottomed out. Recovering 140 points off its low in 15 minutes there is clearly still demand in the market. Failure to hold 1781 through next week could spell more trouble for this market globally there has been a massive rush to cash. I anticipate that the area market demand zone will hold as a support for the next month until there is more clarity on direction in equities. Not a lot has changed from a technical standpoint but such a drastic swing creates new contingencies for the coming months. The speed of the market easing off this low at 1681 will give confluence for expectations due to the fact that crypto has been so momentum driven for the past month and a half. Realistically if the market sells back below 1781- 1681 a test of 1231 is likely. However, If ETHUSD can hold this swing low created today, theres a chance we see some price taking back toward its yearly point of control. This is still a bear market for cryptos. It has been 6 months and there hasn't been a new high so overhead supply is going to be a huge issue for the bulls. The first major test of overhead would be Aprils high around 3542-3375, this is where crypto began its slow decoupling from equities. This zone also had little to no acceptance in the past so I expect some profit taking before continuation. Cracking above that resistance is great for the bulls. Moves back above 4000 would have a higher probability and price holding above 4241 could quickly establish the end of the bear market and move into new all time highs. Bull case through the end of the year, we test 4000, maybe test 4400 once if there is strength on a break 4241.
Fundamentals
Whales have felt the pain. Large holders and investors have heavily bought this dip the whole way down and a lot big names are underwater on their investment. Retail has probably been hit worse. Crypto's popularity which can be tracked by google analytics and sign up metrics for brokers shows that 2021 was the biggest year Crypto markets have ever seen. The retail consensus is that we are early and while there is some truth to that but the price of crypto currency has developed a lot quicker than the technology. Throughout the year lots of cash grab have garnered attention with FOMO and buzz words driving flows and taken away the spotlight from developments that have a lot of promise. The idea of decentralization has promise, people are ready to invest, and there is some real world application. That being said, the money has to flow into the right pockets for crypto to develop at the rate its pricing. Another big issue has been an influx of hackers on crypto websites and even within ecosystems. This is a major turnoff for institutions who invest in millions/billions. The community surrounding crypto is resilient from what I seen but a lot of the execution has been poor. As countries continue to adopt Bitcoin and other cryptos as payment methods the market will begin to balance and the pressure of XYZ selling their crypto will dissipate. Furthermore, developments in crypto niche markets like finance, gaming, and DAO's will continue to attract new players. Right now mechanisms are solid, the technology works, but the compensation for developers isn't all the way there. I remain bullish on the prospect of crypto becoming a part of the global economy in some way but from that standpoint we are still in early stages without much clarity from the ECB & Fed.
