Eth Short :: ETF Outflows / DAT Risk

2 days ago

ETH is in a descending triangle on the 4 hour chart which is a bearish pattern.



A few other factors outside of price action that suggest a possible correction:

• Net weekly ETF outflows. -63k ETH last week.
  
• Potential multi-year double top playing out but that won't be invalidated until price falls below $1,000ish which is highly unlikely.
  
• ETH validator exit queue at record high level of 43 days with roughly 25 million ETH queued to exit staking. Not all is likely to be sold, but the record exodus can't be bullish.https://www.validatorqueue.com/
• Proliferation of Digital Asset Treasuries (DATs) that add very little value to the ecosystem to justify a premium over readily available ETFs. Given the recent decline in ETH price, many are now trading at a discount to NAV. This creates the potential for a negative spiral by forcing sales of assets which adds further pressure to others. Tom Lee who has a vested interest in DAT success said the DAT bubble has started to pop (DAT bubble..not specifically ETH). This by far is the biggest risk to the space. It may take some time to materialize but if it does, I suspect that it will be unwind rapidly.
  

There are many incredibly bullish counterarguments that could easily take this back up quickly, so this idea will be invalidated when the upper trend line is broken on volume.

My long-term view is bullish but there is a lot of hype and excess in the space that periodically needs to be cleared out. If the descending triangle plays out, we could see another ~20% drop to the $3,000 range.

I am already short but the more cautious approach is to wait until the lower support is broken on volume.

3 hours ago

Trade closed: stop reached

Upside breakout due to tentative US/China tariff deal. Will re-short if it falls back in the triangle.