Ethereum: Homecoming

Hey everyone and thanks for jumping back Into the cryptiverse today we're going To talk about ethereum Homecoming 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 Cryptographers premium at into the let's go ahead and jump In now we've talked at length of course About the fundamental idea that the Valuation of eth will ultimately return Home to the fair value logarithmic Regression trend line okay This is a thesis now within a given Thesis right there's no guarantee that That it pans out how we might expect There's no guarantee but I still will Remain true to my conviction that Ultimately before we can achieve the Conditions necessary to send ether to New highs what I think is that we first Must visit the fair value logarithmic Regression trend line The reason for this is throughout the Context of History this is exactly what We've seen you can see that back in 2015 We came down here to the regression Trend line And then moved higher And then in 2016 we ultimately faded Into it and then once we tagged the Lower part of it we moved Tire And then even in 2018 all the way down

To 2019 2020 you can see that all the Way over here in late 2019 we tagged it And then we of course got the very brief Recession that sent us lower okay And then we moved higher And so the thesis and we've had this Thesis for you know basically for a year And a half now since q1 of 2022 That ethereum should and in my opinion Will likely eventually return home Now the definition of where home is is Obviously constantly changing okay Because again this is this assumes that The fair value of ethereum increases Like a monotonic function right Therefore the fear of value is always Going up Even if the even if the price of the Underlying asset is not always going up And the reason for that of course is Because we go through bubbles where We're overvalued for a while and we go Through you know pretty bad bear Market Years where we're undervalued for a While and so on and so forth So the idea again is that ethereum will Eventually return home to the fair value Logarithmic regression trend line now The middle part of this band just to Give you a number is currently at 934 934. The lower part of the band is at 6 44. 644 dollars Okay remember last cycle we actually

Went below the band Okay And to the tune of 31 below it actually Maybe slightly more if I get this all The way down to that Wick about a 33 Drop below the band A 33 drop below this band here where it Currently is would put eth at around 400 okay now I said a long time ago that What I would consider to be a fairly Attractive accumulation range for for my Consideration right for just for my Consideration not necessarily for you But what I would consider a fairly Attractive level would be that four to Six hundred dollar range because it Would essentially be you know in the Lower part of the regression band now That does not mean that you know you Need to follow that in terms of a an Accumulation strategy for each there's No guarantee anything that I say in this Video will actually pan out well we must Remember that as many times as I put out A theory about something there are some That do not come true and so There is a consideration there that you Have to make right I mean there's There's definitely narratives that will Support another view and I think it's Probably wise for you to ultimately take Those narratives into consideration but I would also argue that the narratives That will only ever tell you up only

They're only ever going to tell you to Buy the dip and so I was hoping in this Video to provide a different perspective To allow you to see the market in a Slightly different way So the idea as we've said is that Ethereum eventually returns home before Going into another bull market to Eventually take you to take eth to new All-time highs there is a seasonality Aspect of this that we are entering now Which should likely not be favorable for Ether for the rest of the year If we were to go take a look at the Year-to-date Roi of eth which we have Followed quite closely for the duration Of this year we have said Over and over and over again that there Is a very high chance that eth will Close the year below the yearly open Just like it did in 2019. Now remember in 2019 Bitcoin Did not close the year Below the yearly open right it closed The year up almost 2x from the yearly Open and despite the fact that Ethan or The despite the fact that Bitcoin went Up 2X From yearly open to yearly close in 2019 Or almost 2x Ethereum in 2019 Closed the year Below where it opened it About seven percent down or so so that

Raises the question well if ethereum is To follow what it did in 2019 and you Can see this drop here came almost at The exact same time one of the reasons That we didn't really get a lot of Volatility for the last several months Is because we didn't get that you know That that final move to the upside And therefore because we didn't get that Impulsive move higher we never got the Volatility that came with it to get us Back down to these levels and so instead Of doing that instead of going up and Then coming back down we basically just Went sideways until now we've reached The phase of the market cycle where it's Really an unfavorable time for ether on Its USD pair and you can see that it's Dropped here right when it when it did Last cycle But furthermore you can see that as the Year goes on there is a good chance that Ethereum could continue to fall on its USD evaluation and if it were to close The year below the yearly open just to Give you an idea of what the yearly open Was for ethereum the yearly open was Actually at Eleven Hundred and ninety Five dollars So the argument being that there is in My opinion a very high probability that Eth Closes the year below its yearly open Look at this 2019 candle look at it

Right it started off we went up and then Ultimately we came back down and it Closed the year below the early open Year-to-date Roi right you can see that It came down here and then moved a Little bit a little bit back up and it Also had faded here at the beginning of The year as well But again you can see that it was Ultimately a red candle in 2019. And so if we were just to repeat the Context of History Then eth could easily go To the fair value logarithmic regression Trend line the upper part of the trend Line is currently at 1353 dollars right So it wouldn't even be that difficult For us to enter into the top part of This band I mean if you draw a trend Line here just sort of connecting the Dots you can see that if we just simply Fade below this and get some type of Capitulation here into the back part of The year which I think is a high a high Likelihood then that gets you well into That regression band and it takes Ethereum home And I think that you know as investors We must consider the downside risk okay As much as it'd be so much easier for me To just post bullish stuff all the time Believe me like you I get a lot more Views for sure and I wouldn't get dunked On on Twitter nearly as much but what

I've found though you know what I found Is that if you're bullish and you're Wrong A lot of people are much more Forgiving if you're bearish and you're Wrong you just get dunked on right I've Experienced this many many times Um and of course the definition of being Wrong is Up For Debate I mean it's all a Matter of time uh what your time frame Is as to whether you would perceive Something is wrong or not but there is Still a high probability in my opinion Right that eth capitulates below this And and comes back into this level just Like it did last cycle right it's not It's not like it's some huge conspiracy Theory right it's just it's exactly what It did last cycle And it came back down And if you were to look at monthly Returns of ether Let's go look at ether first here in 2019 You can see that There are some pretty negative month Negative negative months here for ether In in the back half of 20 2019. August was negative 21 in 2019 we're Currently looking at negative 10 so far September and October weren't so bad for Eth But then November was negative 17 December negative 15 percent 2020 we got a couple of green months and

Then negative 39 percent I still think Their ease A lot of downside risk and we must be Prepared for it we still have to go Through the uninversion of the yield Curve we still have to get to the point Where the FED is willing to Pivot and we Just simply are not there at this time You can also look at The Ether Bitcoin Valuation And see that we're in very unfavorable Territory right now on average for The Ether Bitcoin pair and yes August is up Half a percent but you know that this Can this stuff can change very quickly Okay so and we still have about a week And a half to go in the month we'll see Where it ends up closing but we also Know that the market can move incredibly Quickly whenever it decides to move so Let's keep an eye on that something else That I I think is at least worthwhile to Keep in the back of your mind is that We've talked a lot about net liquidity Right net liquidity And the idea is that it basically tracks Just the balance sheet of of you know The very essential Banks including the United States right the FED uh Canada Australia New Zealand China and Japan The the ECB and the United Kingdom and Attracts all those and it subtracts out The TGA and the reverse repo you get

Something that looks like this now What's interesting with this chart is That it it actually tracks sorry I need To clean this up a little bit it Actually tracks total three Incredibly well okay incredibly well so Let's go take a look if you were to move This the total three does not include Eth just as a reminder okay so if you Look at total three And you overlay total three here with Net liquidity you can see all right let Me I guess I need to make this log scale You can see that it matches up pretty Well right as as excess liquidity goes Down so too does the altcoin market now There's this idea That What if and I know this is getting a Little a little bit out there so Um let's just uh let's just take this One step at a time and not take it to The bank but I want us to consider one thing okay one Thing here and that is is what if you Were to look at where the valuation of Ether was Over here when net liquidity was at the Same level that it's at today Okay The valuation of eth Was around four to five hundred dollars Four to five hundred dollars when net Liquidity was this level in 2020.

Four to five hundred dollars which is Equivalent To the 2019 High That's pretty big drop okay there's no Guarantee we have to go that low if you Look at the context of History you'll See that you know there's times where Net liquidity is low and and all you Have to do is is see the money printers Turned back on and the market will just Shoot back up so there's no guarantee The market goes on long enough to reach Those valuations But there is a possibility that ethereum Could fade back down to a double bottom At the very least and I think a Reasonable chance at a lower low I think If there's a reasonable chance that eth Sees a lower low And if that happens I think it's Worthwhile to be prepared one Interesting thing and I've talked about This a few times is if you go take a Look at the NASDAQ so let's pull up the NASDAQ this is kind of one of those Things where it's like you know it is it Is it really worthwhile to you know to To make this comparison as as closely as We're making it probably not but I find It fascinating to some degree that the NASDAQ During crash peaked At 4 800. the high if you zoom in here The high

Was right here and I reached 48.16. 48 16. ethereum Pete At 48.67 The low for the NASDAQ occurred At 7.95 Ethereum's low so far is 880. so what if Eve were to go to around 795 That would put it 7.95 in the context of The lower logarithmic regression band 795 would put you right around here That's what the NASDAQ did by the way When the NASDAQ did that It took a long time to see that play out From the high it took 133 weeks to see that devaluation 133 Weeks From ether's high Here 133 weeks Would put you from this high right here 133 weeks Let me uh scroll over here But 133 Would have put you all the way out in May of 2024. Now I hope it doesn't take that long Right I hope it doesn't take that long Because that's actually after the Bitcoin having and that wouldn't really Be a whole lot of fun if if things go South after the having but it's Something that we of course have to Consider and hopefully if we're going to

Go home which I think we're going to do Hopefully it happens before the having Right for for Bitcoin of course Um but again I mean this shows you that Sometimes it takes a long time for the Market to unwind and you know there's Always a chance as well that you get Some type of 2020 scenario where it's Like basically a higher low I mean this Was more or less a double bottom for eth I mean you know I mean the the low over Here was like what eighty dollars and Then the low over here was 89 I mean It's more or less A double bottom uh there's a chance that You could see something like that play Out where it falls back into that eight To nine hundred range rather than going Below 800 but It is at least a worthwhile Consideration to make Considering that the NASDAQ took two and A half years to ultimately find that low It's worthwhile to consider because in Terms of seasonality ethereum is an Unfavorable Waters right now and you can See that it's dropping the same time it Did in 2019. And if it follows 2019 then it means We're probably going to get another drop Relatively soon maybe it'll take us down To the fourteen hundred dollar range Okay Then maybe you get a pump back up only

To eventually fade it again So Considering that the NASDAQ did it During crash considering that The year-to-date Roi Is now in unfavorable territory for eth And history shows us in the prehabbing Year ethereum could close the year below Its yearly open which would put it below 1200 sometime later on this year Because when you look at ether bitcoin's Valuation we know that it's an Unfavorable time from now until and from June really until the end of the year we Know it's unfavorable time for eth and When you go look at Bitcoin Bitcoin potentially here Is in a downtrend right and we talked About this a long time that normally It's the S P 500 that knocks Bitcoin off Of its 20 week SMA in August or September of the pre-election year Right remember that right the S P 500 This correction here just like in 2019 Just like in 2015 just like in 2011 Knocks Bitcoin off of its support level In August or September of the pre having Year right exhibit a Exhibit B Exhibit C And now exhibit d Right every August or September we see Ether or see Bitcoin drop below its 20 Week SMA and get a weekly close below it

Because of this seasonal correction by The S P 500 the issue Is that while the s p could Theoretically go higher eventually even Maybe later this year Bitcoin even in That it's even in that environment where If the s p goes higher would likely stay In a downtrend because that's what Happened in 2019 as well right take a Look at the s p in 2019 and you can see That after after this you know after the S p got this seasonal correction to drop Bitcoin below its 20 week the s p put in New Highs but Bitcoin Just put in lower highs right and lower Lows And there's no guarantee that the s p Pushes higher if we end up getting a Recession so I would argue that Bitcoin Has likely started its secondary scare We did a video on that about that not Too long ago which involves a you know a Process that could last from anywhere at A two two weeks to like six months based On what history shows us okay and again I don't I don't make it that be the Range that's just what we've previously Seen about two weeks to six months and Probably longer than two weeks Um Maybe it doesn't have to be quite six Months but If Bitcoin isn't a downtrend and ether

Bitcoin is not in favorable territory That means that ether has to go down Faster than Bitcoin in that environment And if ether goes if if the ethereum if Ethereum underperforms Bitcoin but Bitcoin is going down then of course That means that ethereum is going down Quicker And you can see exactly how it how it Might play out So yes I know I'm stubborn about this But You know I've been stubborn about a lot of things This cycle and a lot of them not all of Them but a lot of them have ultimately Come to pass right all coins have Ultimately pushed lower the dominance of Bitcoin I know it's on a pullback right Now but it has gone up a lot over the Last year or two we've seen all coins Against Bitcoin drop down I've seen no I've I've argued with countless people On Twitter about about The Ether Bitcoin Valuation but you know there's still no Denying the fact that this is just a Series of lower highs and lower lows Okay And that's all it's been all year and Really since the merge and really since December 2021 and really Since 2017 lower highs Also gotten some higher lows as well

But I still would contend that whether You want to point towards if you want to Be optimistic and point towards the Higher lows you're still likely going to See this fall back in and then be a Higher low from there right if if you Want to be optimistic about it being a Higher low there's always a chance that It's turned into an oscillator as well Um but we must consider this you know There's also this 20-month moving Average that we've talked about a few Times and I don't really bring it up Every time I talk about it but it is at Least something that I I think is is Worthwhile to just to remind ourselves Of is this 20-month SMA You know over here we were we were Getting rejected by it for a little bit And I was very bullish on it I said We're going to break above it and we did And then we came back down and held it As support and then off to the races now It's the opposite we break down back Test it as resistance and then we go This way And if that occurs in a Bitcoin USC Downtrend that means ethereum is Capitulating and if ethereum capitulates That means ethereum is likely heading Home Homecoming and hopefully it comes home Soon because I'm running out of titles Here uh to call this if you look at the

Bull market support band Which is uh the 20 week estimated 21 Week EMA you can see that ethereum Dropped below it around this July August Time frame in 2019. And again here this Aug July August time Frame I mean if you zoom in you can see That we were already getting weekly Closes below the 20-week moving average Right we had some a weekly close right Here below the 20 week SMA a weekly Close right here below the 20 week Estimate both of them though were above The 21 week EMA this one has you know a Good chance of closing below the 20-week Estimate unless there's some type of Sizable rally between now and the weekly Close although that doesn't seem like The most realistic or likely outcome but Again Anything is Possible So The cycle seems to be repeating right we Seem to be fading at around the same Time we did last cycle think about how Many people have just been posting up Only and everything's just you know they Tell you that everything's bullish and Then when it drops they just say buy the Dip but the issue is that in and I've Said this many times in prehabbing years For Bitcoin We go up long enough to lull the Bulls Into a false sense of security I say This because I have fallen into it not

Because I'm you know trying to appear Like you know like I know it you know Like I know it has to happen I've experienced it in Prior Cycles when I thought that I knew you know that that I thought that this was just ultimately Bullish and was not going to come back Down and then we got wrecked absolutely Wrecked so I say to you today I come to You as humbly as I can because I have Been wrecked in Prior Cycles because I Thought the same thing that a lot of People have thought this cycle Right where people say new all-time Highs are coming this year and that and That this cycle is going to be different And the the peak is going to come you Know a lot sooner and then it doesn't And then those calls just sort of Fade Into the Depths of the crypto verse as The people that buy the dip realize that Buying the dip at in the second half of The prehabbing year Can take a lot longer to be profitable It doesn't mean that it can't eventually Be profitable I mean I am long-term Bullish on East believe it or not though I know a lot of people may not believe That But you know I I just remember buying The dip over here and it and we just Watched it Go lower and lower and lower And lower and here's another interesting Thing

How far do you think ether dropped from The 20 week Last cycle not even from the peak of 2019 just from the 20 week it fell 60 Percent A 60 drop from this 20 week Would put you at seven hundred dollars Between seven to eight hundred dollars So you know I think there's a chance That that ethereum does eventually go Home that it it goes to my guess is that We could see that seven to eight hundred Dollar range worst case is that it goes A little bit lower than that worst case Um that four to six hundred dollar range Would likely be what I would consider to Be an accumulation phase of a lifetime If other conditions allow for for me to Call it that it's possible that it could Correspond to slightly higher prices as Well but it's all going to depend on how Things unfold with the inverted yield Curve the Bitcoin dominance the altcoin Reckoning Etc the other thing that I Wanted to mention is if you look at Total two minus usdt divided by Bitcoin So this actually includes eth we've Looked at total three divided minus usdt Divided by Bitcoin this one actually Includes a theory of and you can see That it's basically just coming back up To the bull market support band right in This case a bear Market resistance band And I would argue there's a good chance

That it just simply gets rejected Right We actually had a rally back over here That ultimately topped out around this Level around we're currently at 0.87 note That the 20 week estimated 21 week EMA Is at 0.89 to 0.9 Which is interesting because that's the Same level that we got rejected at over Here before capitulating down to a new Low So I say If this is coming you better you know It's best to be prepared for it You know people can mock the views all They want to but a lot of times what I Find is that people like to dunk on the Views and then when you know are on the Views that I have and then oftentimes We've seen it play out Especially with especially with with the Altcoin market over the last 18 months And then they just say buy the dip again Right You know I mean how long I mean how you Know the issue is that people just buy The dip and they keep doing it they keep Doing it and then they run out of money And then they end up having to Capitulate because they can't afford Their you know some living expenses they End up capitulating the bottom So you have to be careful with the buy

The dip strategy especially in the Altcoin market with Bitcoin and ethereum It has been it has been a generally good Play over The Long Haul with the altcoin Market it's really hit or miss so so at Least do consider that I think that is mostly covered it's Covered what I I wanted to to talk about In this video Um my my general view is that ethereum Is heading home Seven eight hundred dollars seems like a Reasonable area four to six hundred is Really that sweet spot uh it will be it Would provide a lot of value if we went To that region and we'll take it you Know we'll take it one day at a time I I Can't possibly know exactly how low it Will go but I do think we have entered Into the season uh and as you can see Right this this capitulation here below The 20-week customer I think we've Entered into a downtrend and and no one Knows how deep this will ultimately go 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 cryptographers Premium at into the We'll see you next time bye


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