TLDR;
This video discusses the potential for Ethereum to pull back to its 21-week EMA (Exponential Moving Average) in September or early October before rallying to new all-time highs. It also covers the seasonality of altcoins against Bitcoin, suggesting that altcoins may bleed against Bitcoin in the coming months, even as they rally against Ethereum. The video emphasizes focusing on a few good trade ideas rather than tracking numerous altcoins.
- Ethereum is expected to pull back to its 21-week EMA by late September or early October before rallying to new all-time highs.
- Altcoins may bleed against Bitcoin in the coming months due to seasonality.
- Altcoins can rally against Ethereum even as Ethereum drops to its 21-week EMA because altcoins are dropping less than Ethereum.
Introduction [0:00]
The video begins by addressing the current price action of Ethereum, which has been slowly declining since mid-August. The presenter references a previous video where he discussed the expectation of Ethereum rallying to all-time highs after returning to the regression band, but also noted the potential for rejection at those highs.
Seasonality of Altcoins Against Bitcoin [0:18]
The presenter explains that Ethereum's potential rejection at all-time highs is tied to the seasonality of altcoins against Bitcoin. Historically, altcoin/Bitcoin pairs tend to peak around late August. For Ethereum to durably break above $5,000 and allow altcoins to outperform Bitcoin, it would go against this seasonal trend. The presenter suggests that it is more likely for altcoins to bleed against Bitcoin for the next couple of months. Therefore, Ethereum is unlikely to break $5,000 in September.
Potential Pullback to 21-Week EMA [2:03]
The presenter addresses pushback he has received regarding his prediction of a pullback to the 21-week EMA. He argues that such a correction would be normal, citing examples from previous bull markets where Ethereum experienced significant drops in September before continuing its upward trend. He anticipates Ethereum dropping approximately 30% from its local high, which translates to about a 20% drop from current levels, before rallying again. The presenter expects this pullback to occur by late September or early October.
Focus on Key Trade Ideas [5:29]
The presenter explains why he focuses on Ethereum rather than tracking numerous altcoins. He argues that successful investing involves identifying and capitalizing on a few good trade ideas. He notes that during Ethereum's recent rally, altcoins bled against Ethereum until Ethereum hit an all-time high around August 18th, which coincided with the bottom for altcoins against Ethereum.
Altcoin Performance [6:30]
The presenter observes that while altcoins are currently rallying against Ethereum, their local tops still occurred in late August, aligning with the historical trend. He anticipates that altcoins will continue to bleed against Bitcoin, even as they rise against Ethereum. This is because Ethereum is expected to drop to its 21-week EMA, representing a larger percentage drop than what is required for altcoins to reach their respective 21-week EMAs.
Summary of Expectations [8:31]
The presenter reiterates his expectation that Ethereum will likely drop back to its 21-week EMA by late September or early October before rallying to new all-time highs.