Been quite some time since I have posted an Ethereum 0.01% analysis so I decided to post one today since I've been focusing entirely on Bitcoin 0.61% lately. Bitcoin 0.61% has been the coin of interest lately since it's dominance has been super high - and this is something we must watch. Ethereum 0.01% has been trading downwards since 5th May. Every time Eth has attempted to break out of the slum it has failed to do so... this is due to a side-wards resistance line that has been effecting the gravity 5.73% of price since 3rd of June to present day. Price has consistently failed to break the side-wards resistance line for a very long time thus I wanted to wait for price to go lower into a level that can be perceived as logical before going ahead and posting another analysis.
When analysing Ethereum 0.01% today, I discovered we are very near the April lows support zone . This support was the zone that started the up trend last time that took us significantly higher. Due to this, this is a level of interest for us to watch, as it signals we could potentially see a repeat of price going to the highs once again.
Ethereum will move in one of two ways:
1- Ethereum 0.01% bounces at the current horizontal support zone between 419 and 402 before bouncing top the upside and retesting the side-wards resistance line at approximately 449 before either breaking above or retesting the support zone again. This scenario would be ideal for a short term bullish outlook.
2- Ethereum 0.01% fails at current support zone between 419 and 402 and falls lower to the lowest support zone between 368 and 349 before bouncing to the upside, either surrendering at the previous horizontal support zone between 419 and 402 to test as resistance, or breaks beyond that and tests at side-wards resistance at 449.
Bear in mind if scenario 2 plays out that it is much more unlikely that price will immediately break above the side-wards resistance, so trade the lower horizontal support zone with caution.
Where do YOU think price is headed? Leave a comment with a chart and let's share out thoughts!
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Comment
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Ethereum is struggling to get any bullish momentum after is slides further down the horizontal support zone. If price continues like this, the most likely outcome is that price will simply fall out of the current support zone and go to the second support zone between 367 and 349.
Price needs to reverse within the next 24 hours ideally, or at least see some enthusiasm if we're to stay in the zone we're in now.
The further it falls, the harder it'll be to recover to the upside. Especially when there's many structure levels that will now become obstacles for support.
On a technical level I agree with your analysis but lean towards a drop down to the $330 level. From a fundamental perspective I think ethereum is highly overvalued.
Ethereum has a market cap of roughly $42 billion. The best known dapp on ethereum is Crypto Kitties -- in the past 24 hours crypto kitties has had 309 unique users. The most popular app is an exchange based app and it has had 1463 unique users over the past 24 hours.
Taking a look at US equities, MetLife has a similar market cap and is currently valued at $47 billion. It had revenues of $62.31 billion for 2017, employs 49,000 people and has assets of $719.9 billion.
Also consider that Facebook (with a market cap 10 x that of Ethereum) has 1.47 billion active daily users while the combined value of unique users of all dapps on ethereum is around 10,000. I certainly think that ethereum has promise but with so few users and problems with congestion and transaction times, I think it is extremely overvalued at this point in time.
@Smoak, agree with you but it still has potential with augur and all the erc20 coins hosted on the Ethereum network
Smoak
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@TomProTrader @ElRicoTrader, Consider that at a market cap of 50 billion and 10,000 daily users we are valuing ethereum at 5 million dollars per user. That sort of valuation has no logic. By comparison facebook has a 500 billion market cap and over 1 billion daily users so we value each user at around 500 dollars. If we valued ethereum users at $500 per user, and I am not saying that we should, ethereum would have a market cap of 5 million and each coin would be worth 5 cents.
In any event we can trade ethereum and make money off of it in either direction.
KiloMiles
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@Smoak, I am still a newbie in the trading world, but keep in mind that in tech industry people are valuing more a promise for growth than assets.
Anyway I m 100% agree with you, ETH sill overvalued so far even though the expectations in 3-5 years are high.
halcy0n9001
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As you mentioned, the high market dominance of BTC means that ETH is still very much correlated to BTC.
Therefore I think price will head in the direction that BTC moves.
TomProTrader
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@halcy0n9001, Yes, that's the likely scenario judging by history.
Ctslater2
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Hi Tom,
Do you think we’ve bounced from the second level of support? Will we go up from here?
xuanhaimmoer
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hi Tom, I just wanna to share my post about Bitcoin to everyone and give them some information, thank you:
Ethereum has a market cap of roughly $42 billion. The best known dapp on ethereum is Crypto Kitties -- in the past 24 hours crypto kitties has had 309 unique users. The most popular app is an exchange based app and it has had 1463 unique users over the past 24 hours.
Taking a look at US equities, MetLife has a similar market cap and is currently valued at $47 billion. It had revenues of $62.31 billion for 2017, employs 49,000 people and has assets of $719.9 billion.
Also consider that Facebook (with a market cap 10 x that of Ethereum) has 1.47 billion active daily users while the combined value of unique users of all dapps on ethereum is around 10,000. I certainly think that ethereum has promise but with so few users and problems with congestion and transaction times, I think it is extremely overvalued at this point in time.