ETH / BTC Outlook
Summary
TLDRIn the video, the speaker discusses the Ethereum to Bitcoin (ETH/BTC) valuation, expressing a bearish outlook based on monetary policy and historical trends. They note that ETH/BTC has been in a downtrend, often hitting lower highs, and hasn't shown signs of a shift to higher lows and highs, which would indicate a trend change. The speaker highlights that the last cycle's bottom for ETH/BTC coincided with a shift from quantitative tightening to easing by the Federal Reserve. They also discuss the potential impact of an Ethereum ETF approval on the market, suggesting that speculation around this event could lead to a temporary rally. However, without a broader monetary policy shift, they anticipate a continued downtrend for ETH/BTC, possibly bottoming out in the summer. The speaker also touches on the concept of Bitcoin dominance and its correlation with consumer interest, suggesting that a decrease in social interest during the summer months could lead to a final capitulation for altcoin pairs against Bitcoin.
Takeaways
- 📉 The speaker has been bearish on Ethereum (ETH) relative to Bitcoin (BTC) due to macroeconomic trends and monetary policy.
- 🔄 ETH/BTC valuation has been in a downtrend, and the speaker expects it to continue until there's a shift in monetary policy.
- ➡️ Historically, ETH/BTC has bottomed after the first rate cut by the Federal Reserve, which has not yet occurred in the current cycle.
- 🔽 ETH/BTC has been making lower highs, and the speaker does not expect the trend to reverse until there's a change in monetary policy.
- 🤔 The speaker is cautious about the potential approval of an Ethereum ETF, stating that it might not necessarily lead to a sustained uptrend in ETH/BTC valuation.
- 📈 There has been a recent move up in ETH/BTC, but the speaker attributes it to speculation rather than a fundamental shift.
- 🔮 The speaker anticipates that ETH/BTC might have one final bounce before a true capitulation, which could coincide with the summer months.
- 💹 The speaker believes that Bitcoin dominance could increase further, especially if there's a final surge in the summer, reflecting a shift from higher-risk assets to lower-risk assets.
- 📊 The speaker suggests that the current bounce in ETH/BTC might be a temporary countertrend rally before the final capitulation, based on historical patterns.
- 🌐 The speaker's view is not influenced by the Ethereum network upgrade (the Merge) but rather by broader economic factors and regulatory pressures.
- ⏳ The speaker expects a potential bottom for ETH/BTC to be around 0.03 to 0.04, following a possible rejection of the spot ETF and a shift towards looser monetary policy.
Q & A
What is the current stance of the speaker on Ethereum (ETH) relative to Bitcoin (BTC) valuation?
-The speaker remains bearish on the ETH/BTC valuation, expecting it to continue in a downtrend until there is a shift in monetary policy.
What historical event is the speaker referencing to support their bearish stance on ETH/BTC valuation?
-The speaker refers to the last cycle when ETH/BTC bottomed out after the first rate cut by the Federal Reserve in July 2019 and the shift from quantitative tightening to quantitative easing.
What recent development has the speaker observed in the ETH/BTC valuation?
-The speaker has observed a recent move up in the ETH/BTC valuation over the last couple of days, which they interpret as a lower high in the ongoing downtrend.
What does the speaker believe could potentially change their bearish view on ETH/BTC?
-The speaker suggests that a shift in monetary policy, such as a change from tightening to easing, could potentially change their bearish view.
What is the significance of the 'bull market support band' in the speaker's analysis?
-The 'bull market support band' is a technical analysis tool used by the speaker to guide the expected downward trajectory of ETH/BTC. It has historically marked significant support levels that, when broken, signal further declines.
How does the speaker relate the potential approval of an Ethereum ETF to the current move in ETH/BTC valuation?
-The speaker speculates that the current move up in ETH/BTC could be due to traders making a low-probability bet that an Ethereum ETF might be approved, which could potentially mark a bottom if approved.
What is the speaker's expectation for the duration of the current ETH/BTC move?
-The speaker expects the current move to be short-lived, similar to previous ETH/BTC moves, which typically take place over one to two weeks.
What is the speaker's view on the risk profile of Ethereum compared to Bitcoin?
-The speaker views Ethereum as a higher-risk asset compared to Bitcoin due to its exposure to regulatory pressures and its relatively shorter history in the market.
What is the speaker's long-term outlook on Ethereum?
-Despite the bearish short-term view, the speaker is optimistic about Ethereum's long-term success, believing it will be successful once the monetary policy shifts.
What is the speaker's view on the impact of the Bitcoin halving on ETH/BTC valuation?
-The speaker believes that the Bitcoin halving could potentially mark a final move up for ETH/BTC before a final capitulation into the summer, similar to what happened in 2019.
What is the speaker's prediction for the potential bottoming out of ETH/BTC valuation?
-The speaker predicts that ETH/BTC could bottom out in the range of 0.03 to 0.04, following a potential rejection of the Ethereum ETF and a shift in monetary policy.
Outlines
📉 Ethereum vs Bitcoin Valuation Trends
The speaker discusses the downtrend in the Ethereum to Bitcoin (ETH/BTC) valuation, attributing it to macro factors such as monetary policy. They reference the historical pattern where ETH/BTC bottomed after the Federal Reserve's shift from quantitative tightening to easing in 2019. The speaker remains bearish without a similar policy shift and notes recent ETH/BTC increases as 'lower highs.' They also discuss potential signs that could indicate a change in their bearish view, including a shift to higher lows and highs, and the importance of the bull market support band.
🎢 ETH/BTC's Historical Patterns and Speculative Bounces
The paragraph delves into the possibility of a final bounce for ETH/BTC before a full capitulation, which the speaker anticipates to occur over the summer. They acknowledge the potential for error and discuss the importance of the bull market support band in guiding ETH/BTC's descent. The speaker also explores speculative trading behavior, particularly around the potential approval of an Ethereum ETF, and the impact of such an event on market sentiment and price action.
🤔 Analyzing ETH's Risk Profile Against Bitcoin
This section examines why Ethereum is considered a riskier asset than Bitcoin, especially under tighter monetary policies. The speaker argues that higher-risk assets like Ethereum tend to underperform lower-risk assets like Bitcoin in such environments. They also discuss the impact of regulatory pressures and the market cap as indicators of risk, suggesting that Bitcoin's longer history and larger market cap make it a safer play.
📈 Potential for a Final Bounce Before Summer Capitulation
The speaker contemplates the likelihood of a final upward move for ETH/BTC before a significant downturn in the summer. They discuss the speculative nature of this bounce, potentially linked to the possibility of an Ethereum ETF approval. The speaker also provides a technical analysis of the ETH/BTC chart, suggesting that a move back to the bull market support band could be followed by a gradual decline if the ETF is not approved.
🔄 Bitcoin Dominance and Its Impact on ETH/BTC Valuation
The focus here is on Bitcoin's dominance in the market and its effect on the ETH/BTC valuation. The speaker predicts a continued uptrend in Bitcoin's dominance, suggesting that it might peak in the summer as social interest in cryptocurrency wanes. They also discuss the historical context of Bitcoin's dominance and how it has shifted in response to monetary policy changes, influencing the overall trend in ETH/BTC valuations.
🔮 Predicting ETH/BTC's Future Movements
The speaker provides a detailed forecast for the ETH/BTC valuation, suggesting it might bottom out around the 0.03 to 0.04 range following the potential rejection of an Ethereum spot ETF. They discuss the possibility of a final rally for ETH/BTC before a broader market capitulation, drawing parallels to past cycles. The speaker also addresses potential counterpoints to their view, emphasizing that their perspective is primarily based on monetary policy.
📉 Expectations for ETH/BTC and Bitcoin Dominance
The speaker concludes with their expectations for the ETH/BTC valuation and Bitcoin's dominance. They predict that ETH/BTC will top out near the bull market support band and then decline, potentially in response to economic data or Federal Reserve announcements. The speaker also suggests that altcoin Bitcoin pairs might experience a durable breakdown before ETH/BTC, leading to a possible rate cut and a shift in monetary policy that could mark the beginning of an uptrend for ETH/BTC.
Mindmap
Keywords
💡Ethereum (ETH)
💡Bitcoin (BTC)
💡Valuation
💡Macro Downtrend
💡Monetary Policy
💡Quantitative Tightening
💡Quantitative Easing
💡Risk Assessment
💡ETF (Exchange-Traded Fund)
💡Bull Market Support Band
💡Capitulation
Highlights
Discussion on Ethereum (ETH) and Bitcoin (BTC) valuation, focusing on the macro downtrend and bearish sentiment.
ETH/BTC bottomed after the first rate cut in July 2019, aligning with the shift from quantitative tightening to easing.
The speaker remained bearish on ETH/BTC in Q3 of 2023 due to the lack of a monetary policy shift.
ETH/BTC has been experiencing lower highs, indicating a continued downtrend.
The potential for a final bounce in ETH/BTC before a true capitulation is expected this summer.
The importance of the bull market support band in guiding ETH/BTC down and its rejection in the current trend.
Comparisons between the 2016 and 2019 market moves, noting similarities in patterns.
Speculation that the current move up in ETH/BTC is due to traders betting on a potential ETF approval.
ETH/BTC moves tend to take place over one to two weeks, suggesting short-lived trends.
Expectations for ETH/BTC to top out around 0.053, influenced by the bull market support band.
The merge's impact on ETH/BTC valuation and the transition from proof of work to proof of stake.
The influence of monetary policy on the risk assessment of ETH compared to BTC.
The potential for a final surge in Bitcoin dominance in the summer, mirroring past cycles.
The possibility of a delay in the downtrend of ETH/BTC due to short-term strength following the merge.
The likelihood of ETH/BTC bottoming out in the range of 0.03 to 0.04 following the rejection of the spot ETF.
The anticipation of a rate cut this summer and its potential impact on the capitulation of alt/BTC pairs.
The importance of social interest and consumer behavior in the crypto market, particularly during the summer months.
The speaker's overall bullish stance on Bitcoin dominance and bearish view on ETH/BTC until a shift in monetary policy occurs.
Transcripts
hey everyone and thanks for jumping back
into the
cryptoverse today we're going to talk
about ethereum more specifically we're
going to be discussing the eth Bitcoin
valuation if you guys like the content
make sure you subscribe to the channel
give the video a thumbs up and also
check out intothe cryptoverse premium at
intothe cryptoverse
decom the eth Bitcoin valuation has been
in a macro downtrend for a while and
we've been discussing it for a while and
the reasons that I have been bearish on
the E Bitcoin valuation have just simply
come down
to really two to three things number one
last cycle right at least last cycle we
saw eth Bitcoin bottom out after the
First Rate cut right if you look at the
First Rate cut it happened to be in July
of 2019 and we know that well eth
Bitcoin bottomed out just after that a
couple months after
that we also know too that last cycle
eth Bitcoin bottomed out right around
the same time that the FED shifted from
quantitative
tightening to quantitative easing in
fact if you look at where the actual
shift occurred let me move this up a
little bit so we can see this if you go
from the from quantitative tightening to
quantitative easing you can see that it
actually precisely marked the bottom on
eth Bitcoin in September of 2019 and
this is one of the reasons why I did not
think that it was bottoming out Q3 of
2023 because while it was during the
same time in the cycle we had not seen
that shift in monetary policy and so
that is why I still remained bearish on
eth bitcoin over
here because we had not yet seen that
shift in monetary policy now there has
been a move up by eth Bitcoin over the
last couple of days and so I did want to
at least talk about that at this point
everything that we have seen has been a
lower high right everything that we've
seen by eth Bitcoin all these are just
simply lower highs that a lot of people
got excited about but then ultimately
still resolve to the downside and of
course at some point theoretically
the trend will change and instead of
putting in lower highs you'll start to
see higher lows and higher Highs but
because we haven't seen a shift in
monetary
policy I don't think that phase has yet
arrived now if I'm wrong I want to talk
about what you would be looking for to
to sort of see if my view is starting to
be incorrect what I would say and what I
said in the last video I did on the eth
Bitcoin valuation was essentially this
um my view revolves around the idea that
the bull market support band will guide
eth Bitcoin down right so if we pull up
the bull market support band one of the
things you'll notice here let me
actually get rid of these um the
background on it
um so one of the things you'll
notice right here is that at the very
end of it right at the very end of it
actually I got rid of one of the lines I
didn't want to get rid of
this one at the very end of it we had
one final move back up where it was
ultimately rejected by the bull market
support band now we've made the
comparisons between the 2016 move and
the one in 2019 and the one in 2016
after it broke down it just continued to
capitulate right it didn't really get
any more bounces it just went down but
here after revisiting the range low you
will see that eth Bitcoin got one final
bounce back up to its bull market
support band but it was ultimately
rejected by it in fact if you look at
this you will see some similarities for
instance you can connect this low here
to that low and you'll see something
very similar right there then after that
we put in a high and then a lower high
right here above the bull market support
band and you can see that very similar
pattern right there right right so so
far this this move right
here looks very similar to that one
right there does it not looks pretty
similar the the move was essentially the
same you put in a low and then a lower
low and then you get above the bull
market support band very briefly you
come back down below it you get one and
then you see did the same thing right
here you then get another pop back up
put in a lower high and then go back
into the bu sport band and come back
down to the range low right so we did
that right we did that again we we came
back down to the range low now this time
we actually went below the range
low whereas back over here we did not
before that bounce occurred but
regardless in the last video that I did
on eth bitcoin I said that it is still
possible that we get one final bounce
before eth Bitcoin reaches true and Fin
capitulation this summer again I could
be wrong right I could be wrong and just
because I've been on the right side of
eth Bitcoin for a while doesn't mean
that I will continue to be so we first
have to do away with that idea right I
don't I I could you know it it could
reverse before I'm willing to admit that
it has um but I I do remember this uh
this very similar move last cycle and
while I do believe that price dictates
narrative um or narrative follows price
rather than the other way around one of
the things that I said in the last video
on the eth Bitcoin valuation is that if
you get a move back up to the bull
market support band like you had over
here then the interpretation of it would
would probably be along the lines
something like this the move up will be
speculators dubiously speculating that
the ETF will be approved right it's sort
of this low probability outcome where
some Traders are betting that it it
actually might be approved even though
it's not it doesn't really seem like it
has a high probability again I don't
really know if it's going to be approved
or not I would assume that eventually it
will be but everything that I've seen in
the news um and and what you sort of
people in the industry are saying
they're speculating that it's not going
to be approved in May so if it's not
approved in May then what potentially
could be happening right now is you have
speculators making a a sort of a low
probability
bet that if it gets approved then that
could be the low right just like there
were some investors thinking you know
hey maybe this is the low right but one
of the things you'll notice about a lot
of these eth Bitcoin moves is that they
really take place over like one to two
weeks right this first move right here
that we saw back in January you can see
that it topped out that week week well I
guess it yeah and then it went a lower
high the following week the second top
over here which was a lower high it had
a pretty strong move up but then it
topped out on that on that third week so
they tend to not last very long so if my
view on eth bitcoin is going to continue
to be correct which again there is no
guarantee then I would expect this to
top
out somewhere around
0053 plus or minus you know a few perc
right right because that is ultimately
where the bull market support band is if
you look last cycle at that final bounce
before summer arrived it occurred in
miday right it occurred in miday only a
couple of weeks from
now it actually went above the bull
market support band right and you could
actually maybe even connect these Wicks
here um not not quite but it it it
almost made it back up to it maybe if we
switch to a long scale um it's a little
bit it's a little bit closer but not
even really but you can kind of see that
it was just a lower high the first two
bounces had weekly closes above its bull
market support band but they never saw
follow through the third one while it
had Wicks above it it did not stay above
it for a weekly close so right now the
bull market support band for eth Bitcoin
is
05346 to 0534 so it's basically right
around
0534 0534 is essentially where that is
and
so if this pattern is going to repeat
then I would expect it to not durably go
above
0534 right so you know you would
probably see it stay mostly below the
bulling Market support band with some
occasional Wicks above it if it's going
to play out like it did over here before
final capitulation I will say I'm not
actually basing my view on eth bitcoin
on this pattern right I'm not and I I
know that might sound like a surprise
but I'm not basing it on that I'm just
basing it on on monetary policy that's
basically what I've been basing it on if
you go back to the merge when a lot of
people were more optimistic about eth
Bitcoin and they were calling for the
flipping some of the reasons they were
calling for it were due to the
transition from proof of stake or sorry
from proof of work to proof of stake and
you had you know this deflationary
mechanism and so the speculation was
that this change in demand
or sorry that the change in Supply would
cause the eth Bitcoin valuation to go up
because it's now deflationary right that
was sort of the sort of the expectations
back then at the merge and so ever since
then though we know that it's more than
just a supply side thing because if it
were then maybe you would have expected
it to go up it's also based on demand
which is affected by monetary policy and
my views on E Bitcoin for the last two
and half years my bearish views on eth
bitcoin have had nothing to do with the
fundamental nature of eth or what I
think it might be capable of in the
future it has just to do with the fact
that it's slightly riskier than Bitcoin
and during periods of Tighter and
Tighter monetary policy and high
interest rates my expectation would be
that a higher risk asset would bleed to
a lower risk asset it has nothing to do
with ethereum in enough itself and you
can see the same pattern take place over
multiple different asset classes for
instance the Russell has been bleeding
to the NASDAQ right look at the
Russell been bleeding to the NASDAQ if
you look at companies like
rivan been bleeding to Tesla right it's
just that during these periods these
higher risk assets bleed to lower risk
assets right it's not that Tesla hasn't
gone down it has it's just that rivan
has gone down more so the views on eth
bitcoin it's not a reflection of my
ultimate views on whether it'll be
successful or not I actually think
ethereum will be successful long term
it's more so a reflection of just this
is what happens during Tighter and
Tighter monetary policy is that these
higher risk assets bleed to lower risk
assets and the reason that ethereum is
higher risk than Bitcoin is because it's
more subject to regulatory pressures
than Bitcoin is also bitcoin's been
around longer right it's the first it
was the first one it's been around
longer it stood the test of time longer
than eth and so for that reason it's
riskier also the market has spoken the
market cap of Bitcoin is higher than the
market cap of eth and so yet again
another reason why I think Bitcoin is
ultimately a safer play so because of my
views on monetary policy and the whole
higher for longer Mantra I've been
bearish on eth bitcoin for those reasons
now what ultimately usually causes the
transition from tighter monetary policy
to looser monetary policy is the
breakdown of the Blue Chips right that's
when your the NASDAQ Falls or the uh or
Bitcoin Falls right that's normally what
causes the transition from higher or
from tighter monetary policy to looser
monetary policy if you don't see that
take place then it likely means that
inflation is still an issue and the
consumer is still strong and we have to
keep going higher for longer right but
until you actually see that take place
then the FED doesn't really have a
compelling reason to Pivot now I do
think the FED will probably pivot sooner
than the market thinks they will because
I think we're a lot closer to all
Bitcoin pairs breaking down than the
market thinks it is but this was an
outcome that we suggested was a
potential outcome in the last video now
I could be somewhat sympathetic because
you know anyone who's watching this
video if you're bullish on eth bitcoin
and you watch my last video I said
I think it's going to continue going
down you could have a temporary counter
Trend rally after the having right now
here's the
thing I think this is just a countert
rally that will still resolve to the
downside because of my views on monetary
policy not because of my views on E
however if you have been bullish on E
Bitcoin you're going to look at this and
say well this is the start of a you know
this is a start of something else and so
at this point we don't know we don't
know
but again my interpretation of this move
and I said it in the last video was that
the weakest time for Bitcoin and the the
this the the time where eth could make a
move against Bitcoin will be just after
the having just after the having after
the height wears down just after the
having you could see one final move by
it before the final summer capitulation
just like we did over here in 2019
about two months before the First Rate
cut arrived about two months before the
First Rate cut arrived e Bitcoin had one
final bounce and then It ultimately
faded now what I think's happening as I
said is I think Traders are speculating
there's a low probability outcome that
the ETF could be approved I have no idea
if it's going to be or not right don't
ask me ask someone who's more in line or
in touch with that side of the industry
I have no idea but if that's the case
and it plays out out kind of like these
other local tops have played out then
what you would expect to
see is it stall out around the bull
market support band and then slowly
start to bleed and the reason why that
would be the case is because you get the
initial move up right the people over
here get rewarded for buying into the
fear right into the having we get the
bounce because people are speculating
that it might that the ETF might be
approved right but as the end of May
gets closer and if there's not that
overwhelming evidence that it's going to
be approved then you could start you
could start to see it slowly bleed back
down right as the people who bought it
here potentially take profits on it up
here especially if they're not seeing
the signs that is going to be approved
so again at the end of the day I do
think that the narrative follows the
price but if you were to try if you were
to try to assign a narrative to this
move that's the narrative I would assign
it is that investors are speculating
about ETF approval for East
and if it doesn't look like it's going
to get approved you could see it slowly
bleed back down and then once you have
confirmation that it's being rejected
then you could actually see the
breakdown if it gets approved then that
could completely change the trend right
if you were to Overlay right if we were
to Overlay this
fractal I honestly guys I've done this a
long time and you know the whole
overlaying a fractals thing is is not
really my cup of tea because I've seen
it happen where people make these
fractals especially especially for like
USD valuations of assets where they like
they say well this is what happened last
cycle therefore it's going to happen
this cycle and almost every single time
it never plays out right and often times
it's because of diminishing returns
right I think a lot of people sort of
assume that every cycle we won't have
diminishing returns and then we keep
having it um but they overlay the
fractal from a prior cycle and say well
look this is what's going to happen and
then it doesn't happen but if you do
overlay sort of this fractal here and
you just kind of compress it it seems
like this move over here has been taking
place on a a little bit of a shorter
time frame you can actually see like it
it lines up pretty well right I mean you
have you have a low you get a lower low
you put on a high above the bullmark
sport band and then you put a lower high
and then this is right when you get that
final move back up to the bull market
support band before it comes back down
look at this at the end of May and the
end of May I believe is when we'll have
confirmation on whether that first you
know that first deadline comes up right
about the the the last couple of weeks
of May I don't remember exactly when I
think it was like May May 20 something I
I don't know exactly but
um but then you can kind of see like how
that is it's an almost identical pattern
low lower low high lower high between
those highs go below the bullmark sport
bin same exact thing the highs are above
it you get another move back down below
it and then you get one final move back
up before it capitulates into the summer
potentially bottoming out according to
this into July now in my last video on
eth bitcoin one of the things I said was
that if it just breaks down in April and
you get a similar move that you had in
the last two breakdowns what you would
essentially expect is three red candles
in a row that lead into the breakdown
right that's what we had last couple of
times right so over here you have three
Reds in a row and then the bottom came
here you had three Reds in a row the
bottom occurred the green candle but you
know three Reds in a row that ultimately
marked that final capitulation three
months grueling months in a row where
everyone just finally gave
up to me this move right here looks
really similar to this one right where
you run the
lows and then it ends up maybe even
closing the month green
right kind of looks like that one now
here's the thing because
this has happened right because we've
run the lows and we've come back up that
means that if it's going to play out
like the last two cycles then rather
than bottoming out in June which is what
my base case would have been had we just
seen this breakdown in April because
then we would have just been March April
May and then potentially bottoming out
that following month in June which is
what happened last cycle because we've
run it back
up I got to give I mean look guys the
DJs they've been fighting and you know
I've seen for years how you know the the
consumer will not go down without a
fight and my understanding of crypto alt
Bitcoin pairs they represent the
consumer the strength of the consumer
the stronger the consumer the stronger
the alt Bitcoin pairs the weaker the
consumer the weaker the all Bitcoin
pairs we're all Deens at heart right
we're all Deens at
heart so because this has happened and
we have seen that underlying weakness
short-term weakness by Bitcoin against
eth so the short-term strength of eth
against Bitcoin following the
having I think it delays it by a month
right so then that means if you finally
start this downtrend in May as opposed
to what was already happening then it
kind of kicks the can down the road so
if it were to follow out follow this
pattern it would be here it was June
July and August bottom in September in
this case if we resume the downtrend
next month it would be May June July
with a potential bottom in either July
or in August it would be a bottom in
July if it plays out like this move or
sorry it would be a bottom in August if
it plays out like 2019 it would be a
bottom in July if it plays out like 2016
now what's interesting is you also can
see that in 2022 we had a lot of
weakness by eth Bitcoin in May and June
in fact if you look at Bitcoin dominance
excluding stable coins one of the things
you'll notice here is that it has seen a
surge going into the summer months for
the last three years in fact here it
topped in June and then it had a
slightly higher high in July that was in
2021 in 2022 it hit the top of this
wedge in
June in 2023 we did not hit the top of
the wedge but we did see it surge into
the summer right it surged into the
summer into June and also by the way
dominance had a pullback here near the
end of April and then surge into June
and and then it came back down and then
once again I'm speculating that perhaps
we will see a final surge by dominance
excluding stables and also including
Stables into the summer and here's the
thing if we see that move then and we
come up here originally potentially
going to be June maybe it's going to be
July now I don't know it could still
happen in June I'm not completely closed
off to that idea but that gets you right
if it if it takes place in July that
gets you to about
64.5% excluding stable coins right
excluding Stables right now at 58% so
that's another 6 and a half% above the
current level right let's just say about
6% or so well Bitcoin dominance is at
54% 6% move gets you to 60% % which
again is the the 618 retracement on the
F on the the FIB retracement tool right
it's the 618 which is exactly where it
retraced to last cycle before topping
out just after rate cuts and just after
and and actually right during the time
the FED shifted from quantitative
tightening to quantitative easing and
I'll I'll throw that back up here so
that you can see it right you can see
that's exactly where Bitcoin dominance
topped out was when the Fed pivoted from
quantitative tightening to quantitative
easing so this is why I haven't changed
my view right and like I get it I mean I
I'm sure people are saying all sorts of
stuff right now about about My Views
especially given this this move but guys
I've been really steadfast on my views
on eth bitcoin the entire time and every
single one of these moves has been a
lower high it was never anything
fundamentally against eth that I had it
was just based on monetary policy I
think that after the FED pivots I think
that eth Bitcoin will bottom and then
it'll start an uptrend but because that
hasn't happened
yet I don't think that this trend is
necessarily over one common Counterpoint
that I see and it's it's a fair one I'm
not trying to dismiss it I only bring it
up if it is fair if it's not fair I'm
probably not going to bring it up one
Fair Counterpoint that I see is that
well eth Bitcoin had this top at the
merge so what happened happens if it
bottomed at the having right that's a
fair
statement it's possible right it's
possible but again my view is based on
monetary policy not about these
narratives furthermore another
Counterpoint to it is that eth Bitcoin
did not top at the merge it actually
topped in 2021 so this was actually a
lower high right so that we actually had
a high over here and then we had a lower
high that occurred at the merge so maybe
this is your second to last low at the
having and then the last low could be
due to or could be following rejection
of the spotf I want to be clear right
when I had this view on eth bitcoin back
in you know late 2021 early 2022 it's
not like I thought that final
capitulation would correspond to a
potential rejection of the spot ETF I
have no idea I think it just happens to
be lining up and I think that's what
people might blame if it happens right
if e if the spot ETF is rejected in May
and eth Bitcoin capitulates then I think
that's what's going to be blamed but we
didn't even have that last cycle and it
still happened it still happened so I
don't you know I don't think that that
is necessarily going to that like my
view that I've had has never been
contingent on anything related to the
spot ETF right there's even a there's
even a world where it gets
approved and it still bleeds because
maybe people price in a lot more demand
for the ethereum spot ETF than there
actually is maybe people still prefer
Bitcoin over ethereum because we're
still in tighter monetary policy so I
would argue that my view isn't even
dependent on whether it's approved or
not I hope it is approved honestly I
hope that the ETF is eventually approved
if it's approved in May great I would
prefer I would almost prefer that so we
don't have to talk about it for the next
year but my point is that my view is not
really dependent on that my view is just
dependent on monetary policy and so
far that view has been correct right eth
Bitcoin did not bottom here we took out
that low it did not bottom in October it
did not bottom in January a lot of
people saying it had bottomed
then has it bottomed here maybe I don't
think so though I don't think so I would
say the odds of it bottoming here are a
lot greater than back over here in
January and one of the reasons I said
that was because everyone said well the
next thing to look for is the eth ETF
right you guys remember that when we had
this rally and everyone got excited
because they're like all right well now
now we're going to Rally into the spot
ETF for eth right and I said well guys
we're forgetting one thing right the
having comes before that so while I know
people are getting excited about the eth
ETF the having is going to come first
and that's why eth Bitcoin will likely
go back down and put in a lower low
regardless of whether what happens with
the Spy DTF for eth because the having
is going to come in
April so so we could have a scenario
where you know the people they think
that this is the low because it
corresponds to the Bitcoin having just
like we saw a high at the merge but what
if the final
capitulation right
here corresponds to bad news like the
rejection of the spot
ETF which might actually coincide with
retail showing weakness and the FED
cutting rates and just as that happen
happens as potentially final
capitulation happens into the summer
months just like we've seen the last
three
Summers that is when it finally bottoms
out just after everyone gives up on it I
honestly think it would be somewhat
poetic if e Bitcoin breaks down upon
rejection of the spot ETF and then
everyone then puts on their Maxi hat
just as the Bitcoin dominance trend is
ending this Bitcoin dominance trend has
been going on since May of 2021 now you
might say Ben that's not true Bitcoin
dominance was putting in new lows in
September of 2022 again including
Stables you're right well for this cycle
it wasn't a new low but it was a new low
for this cycle in at the merge but the
dominance view is is based on on all
Bitcoin pairs not stable coins if you
exclude Stables dominance excluding
Stables bottomed in May of 2021 right
this trend has been going on for almost
3 years this may will be three years of
this Bitcoin dominance
uptrend assuming it hasn't topped right
my argument is that it's going to
continue to go up into the summer and
finally top out just as social interest
in the cryptoverse Fades and you can see
I mean you can really see it happening
already if you you know if and by the
way if you look at dominance excluding
Stables we had this exact same move
going into rate Cuts last cycle you'll
see dominance excluding Stables was
putting in lower highs you see that a
high a lower high a lower high and then
guess what happened it swept the high
you see that right here you see how we
swept this high and then after sweeping
the high dominance excluding Stables
came back down as eth Bitcoin got that
final bounce before summer it dominance
excluding Stables swept the high and
then came back down for one final move
and then dominance excluding Stables
then rallied into the summer now look at
what happened
today lower highs by dominance excluding
Stables you sweep the high exactly right
look at that sweep the high and then
it's come back down look back over here
look how much it dropped it dropped from
61% down to 55 a half that was a big
drop back then you know that was a big
drop now I don't think we're going to
see the same magnitude a drop this time
because this spread here was larger than
the current one right this High here was
like almost all the way up to
58% down to 50% right about an 8% swing
between those lows and the highs if you
look over here it was from about
59% down to about 54 right so only about
a 5%
swing so it's compressed
somewhat so while this
pullback was
61 to 55 A5 right so you had about a
what that's a 4 and a half% move 60 or
No 5 and a half% move that's 61 not 60
so 5 1/2% move from 61 down to 55
1/2 here it's already dropped from 59 to
56 and a half right I mean it's and that
doesn't even include what's happened
today this is just based on the last
data point it's actually probably lower
than this right now this is just based
on the last data point that we had but
dominance has gone down today so you
know I mean if it goes from 59 even to
56 so what like that's basically what it
did last time and then it still curled
up it curled back up going into the
summer and then it surged in June and
July and
August here we might have to wait till
June but I think maybe it starts to
Surge in May June July could be June
July August but I think it's probably
going to play out in a very similar
fashion in fact if you connect these
dots it almost looks like we're just
back testing the breakout point right we
can go look at it dominance excluding
Stables on trading
view look at this if we just connect
these dots perhaps it'll yeah I mean
it's a bit handwavy right I'm not
connecting this one because it it it
fits my narrative better not to but I
mean you can kind of see that it's
coming back in and maybe it even goes
below it right maybe it comes back down
to this trend line over
here right we've been holding that trend
line forever and also by the way if you
look at excluding Stables we're still
above the bullmark sport band
right so sorry I clicked on the wrong
thing right we're still above the
bullmark and you can even see there was
another time previously where dominance
excluding Stables got below it we then
got a rally back above it and then we
kind of came back down and held it as
support just as we held the trend line
as support what if the same same thing's
happening right we went below it we then
got a pop back above and now we're just
sort of fading back into it but I'm
guessing that this bull Mark SP is going
to continue to rise here and lift the
dominance with it the dominance
excluding Stables is at around 57 to 57.
38% that's only a half percent lower
than where we currently are right that's
where the 21 we EMA is a half perent
lower than where we currently are if e
Bitcoin get a move to 0.0053 to its
bullmark support Bend there you have it
right there you have dominance excluding
Stables back down to its bullmark sport
band at the same time that eth Bitcoin
gets up to it's bullmark sportband so my
guess is that you're going to see eth
Bitcoin top out here in the next week or
so around the bull market support band
and you could see the turn happen either
around the labor market data released
next week or it could be around the
inflation data released later on in
May and again I mean it also could
theoretically shift at the next fed
meeting which is coming up really soon
so I would I would keep an eye on this
because it seems like it's really
playing out very similar to what
happened over here and I I I can't help
but feel like once again everyone's
potentially falling for that same
Playbook that they fell for in
2019 just before those rate Cuts
arrived so that's my view on the market
could I be wrong absolutely I've been
wrong about many things over the years
this is one one thing that I've um been
on the right side of for the last couple
of years for reasons I've stated based
on monetary policy monetary policy
hasn't shifted therefore my bias on it
Still Remains down I ultimately think
eth Bitcoin is going to bottom out
around3 to 04 I don't know exactly where
but that's what I would ultimately
expect um and I think if it gets down
there there's going to be a lot of
people calling for it to go back to 01
02 but I don't think it's going to go
that low I think 03 to 04 following
rejection of the spot ETF is likely the
bottoming process for the eth Bitcoin
valuation and I think that the current
move by eth Bitcoin is sort of the last
harra just like it got in 2019 before
rate Cuts arrived before It ultimately
capitulated down into the summer so that
is my view it has nothing to do with
spot ETF I tried to provide some
narrative around it if you want a
narrative to go with the chart but I
don't really think you need one it looks
the same thing like it did last cycle I
said it's possible we get one final
rally back up to the bullmark sport band
at around 053 to 054 before capitulation
of the summer it seems like that's
what's happening just because it's
happening doesn't mean I'm right it
could be that it is a low but in order
for confirmation of that you would need
to see Bitcoin do or you would need to
see e Bitcoin get above its bullmark
sport band and then start holding it as
support right and if you don't see that
then I still think it's just going to be
yet another lower high that everyone
once again got excited about that
ultimately resolved to the downside the
last thing I will say is that last cycle
that eth Bitcoin
capitulation occurred it finalized
after alt Bitcoin pairs broke down so
one thing about this bounce is that alt
Bitcoin pairs had not yet broken down
right they haven't had a weekly close
below their range low so I think that
you're seeing something very similar
with all Bitcoin pairs that you saw over
here one final rally up to the bullmark
wor Banner it didn't even make it to the
bullmark wor band back then and then it
came down right I think you're seeing
something like that happen once again
with all Bitcoin pairs one final push
before capitulation down to the range
lows this summer and because this is
happening because of this Bounce by eth
Bitcoin now maybe you do see all Bitcoin
pairs durably break down before eth
Bitcoin that's what happened last cycle
anyways all Bitcoin pairs durably broke
down the week of June 24th eth Bitcoin
broke down the week of
July what was it July 7th um July 8th
right so the eth Bitcoin broke down two
weeks after alt Bitcoin pairs did so
with this move by eth Bitcoin perhaps
that's something one thing I was looking
at is while e Bitcoin did get a close
below the range low from June 2022 a
weekly close below it what's kind of
interesting is that it did not get a
weekly close below this recent low right
this recent low was at
079 and then the weekly close was at
0.0048 so perhaps that is is something
to sort of take note of again my
expectation is that it will still break
down all Bitcoin pairs might actually
break down first just like they did last
cycle in a durable fashion right I mean
to some degree e Bitcoin already did
break down because it got a weekly close
below .49 but I think this is the final
the final
push before the final capitulation into
the
summer as we get into potential rate
Cuts I don't know probably not in May
right I don't think we're going to get a
rate cut in May but I I could see a rate
cut coming sometime this summer um
probably not a huge one unless something
catastrophic happens right but it could
be just sort of of like a 25 basis point
rate cut could be a 50 basis point rate
cut in fact in 2019 we got a rate cut in
July you know maybe there's just some
underlying weakness that occurs you know
in the summer and I've talked about that
before with all Bitcoin pairs is that
you can see that we got a rate cut in
July in
2019 that was when all Bitcoin pairs
broke down and the reason I think this
happens is it goes back to the social
risk I I think that people lose interest
in crypto in the summer months a lot of
times and when people tune out that's
when the bid for altcoins against
Bitcoin kind of dries up and then that's
when Bitcoin dominant surges as you saw
Bitcoin dominant surge in 2021 and 2022
and in 2023 in the summer months and you
can see the social risk is is kind of
still looking 2019 esque right it's now
putting in lower lows from this low
right here and lower highs which is
exactly what happened over here in 2019
just before rate Cuts arrived so I think
the reason why you can get that
capitulation of all Bitcoin pairs in the
summer is because detail is once again
tuning out you know I know there were
some people that were kind of hopeful
that maybe they would tune back in but
if you look at YouTube views um for a
lot of these crypto YouTube channels
there was a spike going into the having
but I mean look at this it's just been
bleeding ever since then right it's just
been coming all the way back down so I
think that's kind of the reason that you
could see final capitulation of all
Bitcoin pairs this summer is because in
the summer months is often times when
people stop caring about the markets for
a while and if the bid for altcoins
disappears relative to bitcoin that's
when alt Bitcoin pairs capitulate and
you've already seen some alt Bitcoin
pairs already capitulate um you know
madic Bitcoin has already you know it's
already been in the process of
capitulating well below its range lows
um same thing with with Ada Bitcoin and
and Dot Bitcoin um they're well below
their range lows uh and so on and so
forth right the list goes on and on but
again those are my views I don't know if
I'll continue to be right about the
trend but those are at least the reasons
why I remain um optimistic on bitcoin
dominance and I remain bearish on the
eth Bitcoin valuation monetary policy
has not shifted once it does I will then
be looking for a low on E Bitcoin but I
don't think that's going to happen until
this summer if you guys like the content
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for this time see you guys next time bye
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