ETH continues to fall to relative lows, sitting now at $405 after briefly breaking below $400 overnight.

I think ETH remains around $400 today before a rebound starts tomorrow/this weekend.  However, a lot of that depends on the price of Bitcoin – a fact I haven’t properly expressed or explored.

Bitcoin and Ethereum Move Together?

Intra-day movements are often extremely similar between BTC and ETH, as you can see below:

While these charts look identical, if you look at the ETH/BTC ratio, ETH performed worse than BTC, despite following the same pattern –

For ETH holders, watching this ratio fall back into the .05 range has… not been fun.  Since the peak of $1400 on January 13th, BTC has outperformed ETH significantly, with the ratio moving from .09 to .054.

So while the price direction is often highly correlated, the ratio has actually been quite volatile.

Zooming out on the ETH/BTC ratio since the beginning of 2017 you can see just how much fluctuation there has been –

Now overlaying this graph with the price of ETH (green line), the big price increases throughout the past year have often coincided with big gains on the ETH/BTC ratio.

The price movements between BTC and ETH are highly correlated the majority of the time, until they diverge greatly. 

I expect that the next ETH run up will take place between late April – June.  I also expect ETH to outperform BTC significantly on the ratio, getting back to .1 at a minimum.

Longer term, over the course of 1-2 years, I see the ratio reaching .2 and beyond.

So, what happens if Bitcoin falls right now?

ETH, in turn, would drop lower as well – however, I think we’re close to reaching a bounce point for the ratio.  If both BTC and ETH continue down, I think we’ll hit a bottom on the ratio of .05, before ETH starts gaining.

I think there’s an imbalance right now between BTC/ETH which will play out positively for ETH over the course of 2018.

 

Ethereum broke below $450 over night, recovering to $470 this morning before falling back to the $450-460 range.

I see the price breaking below $450, into the $420 range mid-week – possibly testing $400 – before a rise this weekend.

Timing the bottom is incredibly difficult, my advice remains the same.  Buy at sub $500 levels, DCA’ing as the price goes lower.

Great News for Ethereum-based Tokens

Last night Coinbase wrote a post announcing the addition of ERC-20 support.  Basically this means Coinbase will soon be adding new, Ethereum-blockchain based coins.

I’ve been excited about this for awhile and believe holding the coins with a high probability of being added to Coinbase is a HUGE OPPORTUNITY.

Since the announcement we’ve seen big gains from some of – in my opinion – the most likely ERC-20 coin additions –

BAT (Basic Attention Token)  $.25; +25% vs. Yesterday

ZRX (0x Decentralized Exchange Protocol) $.68; +14% vs. Yesterday

These are two of the most promising projects in the space;  When I recommend coins to friends/family – outside ETH, I always point to BAT and ZRX.

Full disclosure – I’m invested in both… obviously.

In a follow up post tomorrow I’ll go more in-depth about the reasons why I think these two coins have massive potential.

I  believe that once they appear on Coinbase the pump will be legendary.  Huge potential with these two coins at the price points they are at currently.

To illustrate that point, check out the zoomed out view of these coins just to understand how much potential they have:

BAT (Basic Attention Token)  -77% vs. ATH

ZRX (0x Decentralized Exchange Protocol) -72% vs. ATH

Look forward to more in-depth posts about BAT and ZRX, along with other coins, starting tomorrow.

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Accumulate ETH at levels under $500, BAT under .30, ZRX under .80

I’d always imagined that I’d start this blog during a bull market. WRONG!

In the first two weeks of January ETH exploded all the way up to $1400.

Since then – barely more than 2 months later – ETH is down more than 66%, currently down to $470.

It’s been hard watching Ethereum’s price tumble over these past 2 months. As the chart above illustrates, there have been micro “recoveries” and fake-outs along the way. It’s clear this bear market is for real. But why?

Nothing changed fundamentally with Ethereum. In fact, Ethereum’s development is going ahead of schedule.

So why has the price crashed so much? When – if ever – will it stop? WTF is going on?

Manipulation & Whale Games

I think we’re dealing with a highly manipulated market, perfect conditions for whales to feast. In crypto, new money is always tested. The people buying Ethereum over the past 3 months are all in the red. These are SUPER SMART PEOPLE who are taking a chance investing in a highly speculative technology. Yet they have that seem feeling in their stomachs the idiots who bought TRON do.

What we’re seeing is the weak hands being shook, combined with the smart money (hi goldman sachs) coming in. This latest bear market is creating a one-in-a-lifetime opportunity for smart investors to get in at a reasonable price.

Smart Money is Coming In

The investment banks / hedge fund money has turned the corner. They are the ones accumulating now. This is happening.

Are they down right now? Quite possibly. After all, anybody who has bought in the last 3 months is down. But the floor is being created, and it has springs.

It’s my opinion that they are accumulating HEAVY at these levels – setting up a foundation to push the price higher during the next surge.

This is still just the 2nd innning – the smart money knows this.

OK… but when’s the bottom?

It’s scary to buy an asset that is “plummeting.” Further supporting this FOMB (fear of missing bottom) is the historical data from Bitcoin. I mean, check out Bitcoin’s crash after it’s 2013 all-time-high:

Why wouldn’t we expect a similar longer term bear market?

Different Times, Different Technologies

While the patterns have similarities, today’s market is running at a much faster pace. The technological advances of Blockchain, and Ethereum in particular, are creating a hyper-reactive environment where a larger bear market will only last a few months.

Overall, the fundamentals behind investing in Ethereum have never been stronger. This is a “blood in the streets” buying opportunity. Is this, $470, the bottom? Unclear. I don’t think we’ll dip under $420. After that, $324 is the number. I don’t see anything below that.

With that, I’m buying now. And I’ll continue to buy if it dips lower.

Zoom out

Looking back, that multi-year Bitcon bear market was truly brutal. Buying BTC @ $1000 would have been one of the worst investment decisions of your life. Even buying BTC @ $500 would have been a terrible decision. After all, the price went down to $200. Timing the bottom is very difficult.

When you zoom out, that period of time barely registers –

Now zoom out on the Ethereum chart. As I said earlier, this is still the 2nd inning. The people who bought over the past few months will be rewarded – if they can hold onto it. Same as it ever was.

Looking back in a year, sub-$500 Ethereum will be one of the best purchases of your life.
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Accumulate at levels under $500. Buy this dip.

Over the past year I’ve been asked a lot about cryptocurrencies/blockchain, fielding questions about the technology, investment opportunities, and even crypto portfolio management.

I’ve decided not to actively manage anybody else’s money.

That said, one thing I’m really looking forward to is getting my thoughts and ideas down on paper, so I can easily share them with friends, family, and whoever else may stop on by. An outlet where my thoughts can sit online forever.  For better or for worse.

My goal is to write a bit about the crypto ecosystem every day.  Naturally some posts will be longer and more in-depth than others.  I want to use this platform to get my ideas out on a daily basis.

For those who venture on, god bless and god speed.

Strap on your moon boots.