Ethereum is Going Lower… Here is Why

This article is about how bitcoin could hit around the $14,000 range. This means that bitcoin has historically hit every breakdown target, and bitcoin is currently breaking down from a descending channel. That means that bitcoin has an additional 25% more downside to go, which also means that it’ll drag down the entire cryptocurrency market, including Ethereum. I wanted to go over how Ethereum could potentially hit the $500 to $600 range if Bitcoin decides to break down now. As you may know, when you stake your cryptocurrencies, it’s safer to put funds in crypto trading bot. Jet-Bot is one of the best platforms for generating passive money by copy trading your cryptocurrency if you are still not a crypto currency holder. Jet-Bot has a lot of security measures in place to protect your funds.

Breakdown target

Ethereum doesn’t have a ton of historical data compared to Bitcoin just because it hasn’t been around as long as Bitcoin, but in the first cycle it created a head and shoulders pattern and it broke down from it now. The crazy thing is that just like how Bitcoin hit every breakdown target, Ethereum also hit this head and shoulders perfectly down to the dollar. This downside target was held as support during the 2020 crash. It continues higher.

The structure of Ethereum is very similar to what happened in 2017. And just like it broke down from the head and shoulders pattern over here, Ethereum also broke down from the head and shoulders pattern and hit the breakdown target. Does that mean that Bitcoin and Ethereum have bottomed out? The answer is maybe, but I’m going to be going over why we could be going lower.

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Bitcoin vs. Ethereum structure

I’ve heard a lot of people talk about and share how Ethereum’s maturity in terms of market structure is very similar to when bitcoin first came out from 2011 to 2015. That’s what made Ethereum very attractive to a lot of investors. Just because they felt like they missed out on Bitcoin, they wanted to jump on the next best thing, which was Ethereum.

When Bitcoin topped out in 2011, it corrected around 93% to 94%. The second time around, it corrected around 85%. So if we compare the correction of Bitcoin to Ethereum, the first time around, Ethereum corrected around 94%, very similar to Bitcoin’s first correction, and the second time around, it has already corrected around 80%. So, if we see a drawdown of 85%, Ethereum will be worth around 640 dollars.

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You see, when Ethereum topped out at $1,400 in January of 2018, it corrected 50%, then it corrected another 50%, and another one.

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Right now we’ve only corrected once twice, so we should be seeing at least a third one, and it’s very similar to what happened with bitcoin during its first cycle. It corrected 50% four times in a row, and then the second time around it corrected at least 50% three times. The third time around, it didn’t hit 50% exactly. It was corrected by approximately 45%. If it ended up correcting like 45% just like it did with bitcoin, then that would put Ethereum around $640.

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Eth. Regression band target

To go over some other technical targets, after breaking down from the head and shoulders pattern, Ethereum formed this bear pennant and continued its downward trend. You would measure the pole to the breakdown point right over there, and we didn’t hit it exactly to the bottom, but it was pretty close to the bottom today. We saw something very similar where it broke down from this head and shoulders pattern. It might consolidate longer. We do need this pattern to mature out a little bit.

Let’s just say you know that we will continue the downward trend. This breakdown target is actually a lot scarier than the five, six, or six hundred dollar range. If we do break down, that actually leads us as low as 492 dollars. If we don’t hit it like we didn’t hit it in the first cycle, maybe it’ll hit around $529-550, but generally this is the range that you want to be looking out for now.

If we decide to lower the pull because you don’t want to count this price accumulation over here, then the breakdown target isn’t as bad as the $400 range. It would actually bring it down near the $653 range, which is near the $600 range.

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The breakdown target will actually be in line with the Ethereum regression ban as it continues higher. It may hold at support just like we held at support in December of 2018 at the lowest point of Ethereum.

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I’ll be keeping a pretty close eye on this chart. I don’t think we’re going to break down at least until the end of July or somewhere in August, but there is always that possibility that Ethereum could always, you know, rally a little bit higher, then break down. Then that target will be a little bit different. It might be in the $700 range because, over time, this band will continue to increase.

I am buying Ethereum every single day, but not as much as bitcoin for me personally. I’m waiting for Ethereum to drop down to these green accumulation zones, and that’s when I would consider accumulating Ethereum a lot more heavily compared to Bitcoin.

Bulls vs Bears

I do want to go over some bull versus bear cases on why Bitcoin and Ethereum have already bottomed and could continue higher or why we could go lower. Historically, when Bitcoin flashed the Pi Cycle Bottom indicator, it was pretty much the bottom of the market. The Pi Cycle Bottom indicator hasn’t flashed but is about to flash within the month of July of 2022. Of course, this could be a potential bottom and we could go a little bit lower after the indicator flashes and could reverse, but did you know that the Pi Cycle Bottom indicator flashed once for Ethereum but it did not signal the bottom.

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You saw in 2018 when Ethereum’s bicycle bottom indicator flashed? What happened afterwards was another capitulation or a sell-off. It’s very possible that what happened over here, we could experience something very similar over here where the Pi Cycle Bottom indicator flashes, maybe sometime in July, and then three months later we get another sell-off all the way down to the $600 range or may be it will be a good chance for ethereum and bitcoin copy trading. If this happens, it means that Bitcoin will go lower after the Pi Cycle Bottom indicator flashes, but if Bitcoin decides to reverse after it gets the Pi Cycle Bottom indicator, that means that Ethereum will most likely continue higher as well, and we will not reach down to these price levels, which no one will be complaining about.

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Next, I want to take a look at Ethereum’s weekly RSI. We haven’t been this oversold since November of 2018, so this could mean two things. Number one, we could potentially reverse just like we did in 2018 because we’re extremely oversold, or two, Ethereum is aside. You know, the weekly RSI for Bitcoin reached a new all-time low of being extremely oversold. It’s the first time the entire crypto market is going through a recession. Although Ethereum didn’t make a new all-time low of being oversold, it was just by a few points, but it’s very possible that we could see one more sell-off. It doesn’t have to happen, but it’s always worth preparing for.

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Also, we have the monthly MACD for Ethereum continuing to fall, which could suggest that Ethereum will either see a little bit more downside or we could just consolidate sideways. Because the MACD is a lagging indicator, this could continue to fall while Ethereum trades sideways.

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If we look at the reversal zones on the Lux Algo, we are currently holding this area as support just like we did on the 2020 crash, so this is a point for the bull where we could hold this area at support and continue higher from here.

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Right now the Dollar index, also known as the DXY, is currently breaking out from this trading range and, as most of you know, when the DXY is pumping, that’s usually not good for the entire crypto market, whereas when the DXY is dropping, that’s actually really good for the crypto markets. The next level I’m looking at for the day is going to be the 108 level, and it could possibly go as high as 120. I know that seems ridiculous, but that is something to consider as a possibility.

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So keep an eye out on the DXY because if it continues higher, then there’s a higher chance that Ethereum will continue lower. Where do you think Ethereum is going next? Do you think we have bottomed out or do you think we’re going to go lower?

 [This article is a transcription of a video made by Eddie Moon]

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