Ethereum’s Volatility Is Disappearing. What Does This Suggest?
Cryptocurrencies, once one of the most volatile assets in global markets, are now among the least volatile assets. This lack of volatility started after the hyper-volatile weekend of June 18 and 19. Case in point: Ethereum’s chart which we’ll feature in this text. So, is this good or bad?
A more in-depth view on the question “is this good or bad” is what we will provide in our next crypto investing research alert, which will be shared in our premium service today. In this text, we share a few highlights without too much detail.
First of all, as per our crypto research, we always look at cryptocurrencies in a top-down approach. The first thing we ask ourselves is what crypto leading indicators might be suggesting.
One of those leading indicators is the US dollar. While the US dollar has been wildly strong lately, it might also be topping. That’s because of several reasons, one of them being the ETH/USD pair, which is highlighted in today’s post Leading Indicator For Global Markets Setting A Secular Bottom.
Here we can see the ETH/USD chart has been flattening. If (and that’s a big 'if') the US dollar is setting a turning point, it should support cryptocurrencies. That’s because both markets are inversely correlated. In that scenario, we see a double or triple bottom type setup unfolding on the ETH/USD chart.
If we zoom out, we can see how the ETH/USD pair has been falling for 11 straight weeks. This probably qualifies as the longest decline ever in Ethereum. The last three weeks show a stabilization with tiny weekly candles. The lack of volatility is also visible on the weekly chart.
Note that Ethereum can be seen stabilizing right at those 2018 highs, between 1100 and 1400.
Here are 2 trends that might influence Ethereum this summer: a Nasdaq bounce and a bounce for the euro. If (again, a big 'if') the Nasdaq and the euro bounce from here, we may expect a bounce in crypto, which would create the center-left leg of what could eventually become a W-shaped reversal. The 1700 to 2200 area may be a reasonable target.
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