The Ethereum-100 Index
The Ethereum-100 Index
The Nasdaq correlation continues to hold strong. Decentralized Nasdaq is here!
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Cheat Sheet -
Support and resistance levels and our daily, weekly and monthly bias on BTC, ETH, OIL, ES, and NQ as well as our favorite altcoins.
Crypto News
Avalanche introduces Bitcoin bridge as Core wallet feature (The Block)
Coinbase’s advanced trading platform, Coinbase Pro, set to close (The Block)
Gucci Invests $25K in DAO of NFT Marketplace SuperRare to Start Digital Art Vault (CoinDesk)
MATIC Jumps as Polygon Introduces Improved Privacy for DAOs (CoinDesk)
Canadian Regulator Slaps Bybit and KuCoin With Penalties (CoinDesk)
Mark Cuban says crypto crash highlights Buffett’s wisdom (CoinTelegraph)
Binance.US’ Zero-fee Bitcoin Trading May Trigger Fee War (Blockworks)
Crypto Industry Layoffs May Have Unintended Consequences (Blockworks)
Celsius’ Woes Spark Boom in Ledger Sales (Blockworks)
NHL Launching NFT Marketplace for Hockey Collectibles (Decrypt)
Shopify Adds NFT-Gated Option for Online Retailers (Decrypt)
Uniswap Labs Buying Ethereum NFT Aggregator Genie (Decrypt)
BTC Outlook
Looking back at recent history, when Bitcoin sold off rapidly on May 12th, it took almost a month of consolidation before the next leg down occurred. For everyone on Twitter shouting for $15k or $9k or whatever, well the timeline will probably not be what you think it is. This could take a while. Imagining history repeats itself it will not be until July 17th before Bitcoin begins it’s move outside of this consolidation range.
The range from May had only a width of 10% on average. Trying to trade even small moves in this range could be deadly. Expect fake outs in both direction as consolidation continues. The big clue from the last consolidation that a breakdown was likely was a breakout followed by a failed attempt to make a higher short term high. We will be closely monitoring the current consolidation for a similar pattern. Its safest to sit back and wait a week or two for the range to define itself. If there are breakouts in either direction it is prudent to wait for confirmation (lower lows or higher highs). You’ll miss the first few percentage of the move, but you’ll happy that you don’t get cut up by noise.
Possible Course of Action
Long near or under $20k as a long term hold (3+ years)
Do nothing and wait for a breakout
Short rallies
Short targets if BTC loses $20k ($19k, $15k, $9k)
The Bulls’ Defense:
Downtrend has lost momentum
The Bears’ Prosecution:
Global macro uncertainty
ETH Outlook
Last summer and the end of 2021 were the only times in ETH’s recent history that it broke away from its high correlation with the NASDAQ-100. There doesn’t seem to be a lot of predictability tracking when this correlation will break but it does give you a sense of what you are trading. We’ve pointed this out before but if you are big on decentralization then you should be happy that you can now take self-custody of your NASDAQ risk on token. There needs to be an outside catalyst now to break this correlation. Some would argue that ETH2.0 could be this catalyst but many Bitcoin Maxi’s would say that ETH switching from POW to POS will make it even more correlated with tech stocks. The argument is that Proof of Stake (POS) creates a more equity like situation for Ethereum where large ETH holders now have controlling governance of the ecosystem. This is not true with Bitcoin’s Proof of Work where no matter how much Bitcoin you posses you cannot influence the governance of transactions through the system.
The recent break in correlation between ETH and NASDAQ was uneventful. It played out with ETH following NASDAQ still but with an offset cadence. I guess the trade here is to just trade ETH as if you are trading US tech stocks. For now, there’s not much difference in the price action. One thing to note is NASDAQ pays dividends while ETH does not. So, if these markets just continue to grind sideways you’ll need to stake your ETH and lose access to it in order to match NASDAQ dividends.
Possible Course of Action
Caution here as ETH is highly correlated with the tech stock sell off
Wait for BTC to rise above 50-day MA before long ETH
Short ETH/ long BTC still working (long Bitcoin dominance)
The Bulls’ Defense:
EIP-1559 has burned $2,756,054,151 (2,477,619 ETH) so far. Supply constraints should continue to have a positive impact on price.
ETH 2.0 launch
The Bears’ Prosecution:
Global macro uncertainty
Nasdaq correlation and sell off
ETH/BTC pair continues to be weak
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