Transcription
Hey everyone, and thanks for jumping back into the cryptoverse. Today, we're going to talk about Ethereum's dubious speculation. If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up, and also check out the sale on Into the Cryptoverse Premium at intothecryptoverse.com.
We've been following Ethereum's move for a really long time, and so far, things seem to continue to play out in what seems like the most likely way, right? And one of the things that we've talked about was that Bitcoin would likely head to its bull market support band after Ethereum puts in new all-time highs. Well, Bitcoin is nearly there, right? It's nearly there. It's not quite there yet, but it's gotten really close to its 20-week SMA and 21-week EMA. And you can see that Ethereum, of course, has put in all-time highs.
This has been a really interesting month because one of the things I suggested would likely happen was that Bitcoin would fall to its 20-week SMA, but only after Ethereum put in new all-time highs. And it felt like that was not actually going to happen just about a week or two ago. If you guys remember, uh, August 20th, it looked kind of bleak for a brief period of time that Ethereum could actually put in an all-time high in August before getting a correction.
Now, what I want to talk about now is what I think is going to be the general path for a few weeks. Okay? Now, at the end of the day, price action could be interpreted as a random walk akin to geometric Brownian motion. Uh, so the idea that I can predict the path is is somewhat ludicrous. But just in, you know, just sort of continuing the thought process that we've had, I just want to continue on and see if the, uh, the lucky streak can continue here.
So, basically, the forecast that we've had for a while was that Ethereum would not go to all-time highs until after it first went home. And just to clarify to newer people to the channel, home meant the regression band, right? The regression band that it spent most of the cycle avoiding. But the reason it was unable to break through 4K previously was because it had not gone to its regression band. And that was what it needed, ultimately, to sail to new all-time highs. And that's actually how things played out, right? Ethereum went home in April. It then rallied up to 4K. I said, "What I would like to see is for Ethereum to sweep the highs before a September drop." Sweep the highs before a September drop. Looks like that could very well play out.
Now, listen, there's always going to be a chance that I'm wrong and it does not pull back in September, but I want to talk about what I think's going to happen. And just so you know, there is still a chance that Ethereum has another move left in it before it gets that pullback. And I'll show you at least a little bit of evidence for that. No guarantees, and it's not something you should trade at this point. In my opinion, I think the bulk of this move, this impulsive move, is over. You might see it go back up one more time, but I think you're going to get a down period here in September and then probably see it go back up a little bit after that. That's how I'm thinking that this is going to play out.
Now, the thing that we need to first talk about is on the daily time frame, Ethereum is seeing a lot of divergences with higher highs in price, but like lower highs in the strength that it's actually showing. And so what that implies to me is that it needs to cool off in the September and potentially through October time frame, right? So, why, what I want to say is there's still a chance that the divergence continues, but I wouldn't like, it's not something you should be like really hoping for at this point. If you look at the RSI of Ethereum, you, I mean, you can pretty clearly see it's been putting in lower highs here for a little while while it's been putting in higher highs on price. So, it just seems like it's a matter of time before this, you know, it comes home to roost. And I think that's going to happen in September.
But one thing to consider is there are examples where you get sort of like a, sort of like a triple divergence at the very end of a move. Right now, what you'll notice with Ethereum is you have a high and then a sweep of the high. And this sweep was the all-time high that we set. And there's plenty of examples where that's all you get, where you have a high and then you get a sweep of a high before a larger retracement to the 21-week EMA. Um, it's actually happened plenty of times where you have a high right here and then sort of you sweep the high and then go to the 21-week EMA. There is some precedent for like a triple divergence as the RSI goes down but the price goes up. A great example of that would be 2020. That also happened in August, and you should note that the final high occurred on September 1st, and that was a lower high for Bitcoin. Right? So, Bitcoin was not putting in a new, um, you know, a new local high.
Then, Bitcoin, if you overlay Bitcoin USD onto this chart from 2020, one of the things you'll notice is that Bitcoin actually put in a lower high while Ethereum was putting in higher highs, and then Ethereum corrected to the 21-week EMA, and that happened by late September. So, I'll tell you what I think is going to happen. I think that nailing down the exact path is impossible. But with that said, I, there's a really, really high chance that Ethereum finds itself at its 21-week EMA in about a month.
If you look at 2021, you can see that Ethereum also had a correction in late September to the 21-week EMA. And then that ultimately set up a final rally into the market cycle top. If you look at 2017, you'll see that Ethereum had a drop a little bit below the 21-week EMA. And that drop started at the very beginning of September. So, there still does exist a chance that Ethereum gets one more divergence higher on a Bitcoin lower high. But just know that if that happens, that is very, very likely to be the final divergence before you get consolidation back at the 21-week EMA by late September, at which point it will probably then bounce back up. Okay? And it might even correspond to like sweeping the low that we had here in early August.
Now, the other thing, I don't know that it has to go that low. A lot of people have looked at the 21-week EMA and they've gotten a little scared because it's all the way down at like 3100, 3200, something like that. But one thing you should remember with the bull market band is that it is a moving target. And so, I guess the 21-week EMA right now is about 3,300. But remember, I don't actually expect Ethereum to get to the 21-week EMA for a few weeks. And so by the time it gets there, the 21-week EMA for Ethereum could actually be, you know, mid to high 3K range. Like it could be 3,400, 3,500, potentially, you know, 3700, depending on how long it takes to get there.
So, the way I think this is going to play out for Ethereum, it's had one hell of a rally, right? Like, let's not discount the rally that it's already had. One hell of a rally, and we knew that was going to happen after it went home. But we've also said for a long time that the first run of the highs will likely be rejected. Okay? And so I, I don't want to lose sight of that idea that we talked about back over here, back when Ethereum was like 3,400. We said, "Look, what we want to see is we want to see a run to all-time highs so that this, so that the pullback from the highs can correspond to that seasonal September drop." And so I feel like it's going to play out in a, in a very interesting way where it plays out almost exactly how we could have hoped for. Rally into a new all-time high in August, get the pullback in September, and there is still an off chance Ethereum puts a slightly higher high in very early September. Like it did happen in 2017, and it also happened in 2020. So I don't want you to think that that's impossible.
But the argument though is that whether Ethereum puts in a slightly new higher high or not, it's likely going to get rejected at these levels before, you know, somewhere up here, before returning to the 21-week EMA and then bouncing back up. Right? That is the path I think that it's going to take. And one of the reasons for that is because I, I also think that the ETH Bitcoin valuation is going to cool off a little bit in September, October. This has also been a really nice move by the ETH Bitcoin valuation, but I think that you're going to see a macro higher low form on the ETH Bitcoin valuation probably by like late October. So, it could look something like this. Maybe even goes up a little bit more. But I think you're probably going to see it come back down here by late October and then try to go up again, potentially as high as 0.053. So, that's what I'm watching for. That's the most likely outcome in my mind. I know a lot of people might not like that, but remember, it's important to remain objective, and we've been bullish on Ethereum since it went home in April.
But to stay true to myself and what I've said, I've always said Ethereum goes home, then it rallies to all-time highs, but the first attempt to break all-time highs will likely get rejected by late August, potentially as late as early September. Gets rejected, comes back down to the 21-week EMA, and then bounces back up. That's the way I think this is going to play out. And it's because I expect a rejection off of this level, off of the 5K range on the first, on this first approach. It's because I expect a rejection, which is why the coveted alt season is likely not going to manifest itself because in order for that to happen, I think Ethereum has to more durably go to all-time highs. I don't think that's going to happen in late August or September. You could see a slightly higher high and maybe in their good case, best-case scenario, it sweeps 5K, but that's not a guarantee, right? That's not a guarantee.
So I think it makes sense to assume, for me, that Ethereum will likely be back at its 21-week EMA in about a month. Um, and then from there, I would expect a bounce back up to all-time highs. That is how I'm playing this. And it might not happen immediately, right? Like it could bounce up in October, but it might not really get going until a little bit after that. That's how I think this is going to play out. Go back to the 21-week EMA, consolidate a little bit, and then head back up after checking in with the bull market support band.
If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up, and again, check out the sale on Into the Cryptoverse Premium at intothecryptoverse.com. I'll see you guys next time. Bye.