Ethereum (ETH) has been in a downtrend against Bitcoin (BTC) for the most part since the beginning of the year. This spells trouble for the altcoin market just when everyone is expecting the next altcoin season. The weekly chart for ETH/BTC shows a very alarming picture. The price is trading within a descending triangle that has a very high probability of being broken to the downside especially as the price remains below the 21 week EMA. The recent rally in Bitcoin (BTC) that did not see altcoins rising as high has made one thing quite clear and that is the fall in altcoins during the next downtrend is going to push most of them to new lows. In fact, it will be the perfect wipeout that might result in a lot of altcoin projects declaring bankruptcy as they have in the past.
We have been discussing the maximum pain scenario in our analyses for a long time now because that is exactly what needs to happen before the bull run begins. Dumb money never takes the lead. This is a dumb money rally fueled by paid shills and con men deliberately misleading retail traders into thinking the bear market is over when certainly they could not be so naïve or ill-informed to believe that themselves. Some of them are veteran traders with years of experience yet they choose to indulge in such lunacy and post ridiculous ideas just to appease the crowd or mislead it. This is why the best course of action is to always do your own research and due diligence after taking in as much knowledge and information as available. You don’t have to agree with everyone but it helps to hear everyone out.
The weekly chart for ETH/USD shares a similar outlook and shows how overbought the price is. There is no denying that the price is going to come down hard eventually whether it flies to $300 or $400 short term. The fact remains that the bottom is not in and as we have discussed in our previous analyses, as long as there are buyers to FOMO in, this mania will continue. However, when the whales sense that those FOMO buyers are looking to cash out, they are going to pull the plugs faster than they can say “sell”.
Ethereum (ETH) might prove to be a good project long term despite all its fallacies and we might see it contribute enormously to the blockchain space, but it is important not to confuse the price with the tech. In fact, Ethereum (ETH) founder Vitalik Buterin deserves credit for wanting people to worry more about the tech than the price because at the moment this is not the case. Everyone is following the greater fool’s theory trying to buy so they can dump it on the next guy. Very few people are actually interested in the technology as the vast majority is only interested in getting rich quick.