Ethereum: Dubious Speculation transcript

Hey everyone and thanks for jumping back into the cryptoverse. Today we're going to talk about Ethereum dubious speculation. If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up, and also check out the sale on into the cryptoverse premium at into the cryptoverse.com. Also, if you are wanting to go to the first ITC conference, uh, make sure you get your ticket before September 1st as prices will be going up on September 1st.

Link is in the description below. It'll be taking place in Miami. Main conference day will be November 21st. Let's go ahead and jump in. So, Ethereum has had a really nice rally, right? So, I want to talk about that. And obviously, my views on Ethereum are somewhat different from Bitcoin. We explained that in the last video we did on Ethereum. Uh, and you know, we've talked about, you know, where Bitcoin usually finds lows, where Ethereum does, and and kind of how that's connected.

We've talked about the ETH Bitcoin ratio and and how Ethereum is affected by the stock market. So, what I want to do is kind of go through what I'm seeing with Ethereum right now and and just kind of talk about what I would expect to see, you know, throughout the rest of of the year. So, Ethereum has had, you know, a sizable drop all the way back down to around 1,500. If you look at the uh regression band, right, which we, you know, follow, you can see it it's tagged the lower part of the regression band just like it's done a number of times, right?

It did it in 2019, uh did it in uh 2016 as well. And then, of course, it also did it way over here in 2015. Now, in 2015, 2016, and in 2019, when it tagged it, it actually did it at the very end of the year, right? Like in December. Last year, we went to sort of the fair value area in April. And arguably, Ethereum just rallied up to the quote unquote fair value, right? which right now according to this regression chart is around 23 to 2400.

So according to this chart, Ethereum is more or less at its quote unquote fair value. Right now, if you look at the ETH Bitcoin pair, one of the things that I always follow, and I've been following this forever, and we have videos on it back in 2019, is that 20-month moving average for it because, you know, in 2019, we were tracking this and then once we got this big move above it in July of 2020, it was a big deal because we finally broke through this massive resistance that had been holding Ethereum down against Bitcoin.

We're above it right now, but we were also above it in August of 2025, right? And we closed above it and then the next month we gave it right back. So for the ETH Bitcoin ratio, it's moving in the right direction, right? It it is no doubt about it. It's moving in the right direction. We would ideally want to see another month or two where it's able to hold at these levels without just simply giving it right back. Okay? because again it it gave it all it gave it back in September 2025.

Who's who's to know if it's going to happen in September of 2026 or not? But this is something that it looks like it's trying, right? I mean, this is the best Ethereum's tried in a while to to sort of break out against uh against Bitcoin. Now, when I was looking at this, one of the things that's interesting is, you know, how Ethereum has rallied off of the lower part of the regression band and now it's back up to right around where it was back in April.

Okay. Now, the question is is what is the Ethereum rally that we just had, is it, you know, is it more like are we all the way down here where it went to the low and now we're back in business as long as there's not a recession like the pandemic or is it, you know, further up? According to the chart, it would imply that we're further in. Now, here's where it gets tricky for Ethereum. You could argue that Ethereum has been exhausting the bears for a really, really long time.

Okay, it has. I think that, you know, in 2027, I think there's a decent chance Ethereum will will start to pick back up and hopefully do well and going up into 2028, ideally putting in new all-time highs. And and I I think there's a good chance that could happen. The question is is how do we finish this year? All right. Now, I want to take you through a couple of examples for the stock market. How has how has the stock market historically affected Ethereum?

Now, if you're new here, you might not have heard me say this before. And again, seasonality works about 70% of the time. So, about 70% of the time, the things I talk about as it relates to seasonality, it ends up playing out. And everyone when it does play out, no one really thinks twice of it, right? They're like, "Yeah, well, that was going to play out." When it doesn't play out, a lot of people freak out and they're like, "Well, use that." No, this is about seasonality.

What what often happens, not what has to happen. If you look at the last several midterm years, you'll see that in 2014, there was a correction in stocks at the beginning of 2014 and at the end of 2014. Okay? If you look at 2018, there was a correction in stocks at the beginning of 2018 and the end of 2018. In 2022, a correction at the beginning and also at the end. In 2026, a correction at the beginning. And now we're waiting to see do we get a correction in stocks at the end of the year.

Now, whether there's certainly a chance that the low is in for Ethereum, and I would argue the chances that the low is in for Ethereum are actually higher than for Bitcoin. If you look at last cycle, Ethereum actually bottomed in the summer, right? So, who's to say it can't just simply bottom in the summer again, right? Right. I mean, I I've said that earlier this year that [clears throat] the argument for a Bitcoin low does not is not necessarily an argument for a low to occur at the same time for everything as we got a glimpse of that in 2022.

So, I want to go through how stock market corrections can affect things like Ethereum. All right. In 2022, at the end of 2022, the stock market dropped about 20%. Okay? And in that 20% drop that started in August going into October, Ethereum during that period from August really to the market cycle low dropped about 50%. From the rally, from the from the August high to the low, it dropped about 50%. Again, this is not, you know, you have to sort of look, not even care about the bullmark sport band.

You have to basically ignore the regression band and just say, look, Ethereum back then had a nice rally off the June low. We rallied up about 100%. This time we've rallied up about 70 and then we gave 50% of it back. Not everything. It was a higher low and then we went up. So when the stock market back then when the stock market corrected 20% Ethereum corrected about 50 in 2014 Ethereum we don't have a chart for but in 2014 Ethereum only dropped 10% or sorry sorry sorry the stock market only dropped 10%. % at the end of 2014.

And so a 10% drop would not have the same effect. We have seen 10% drops. We've seen other 20% drops. If you want to see what Ethereum did during the S&P's last 20% drop, look no further than early 2025. Right? The S&P dropped about 20%. And in early 2025, you go over to early 2025. Um, starting in in sort of late 2024, I guess, but then going into early 2025, Ethereum dropped about 60 to 70%. A lot of that occurred before the stock market drop.

So, if you were just to kind of take it from when the stock market drop was actually happening, it was about a 50% drop. So the argument would be that a 20% drop in the S&P in two examples in 2022 and in 2025, a 20% drop led to about a 50% drop in ETH. A 10% drop though. We got a 10% drop earlier this year, early 2026. It's a little hard to measure because Ethereum was obviously sort of in that bare market, but just as measured from that, it was also about a 50% drop.

Ethereum doesn't really like stock market drops, but there are examples where it's not as bad. Okay? Like July 2023, the stock market dropped about 10% and Ethereum uh back then only dropped about 25. So, if the seasonality for the stock market were to play out and you have a correction by stocks in the back half of the midterm year starting in August or September, could be late September, that would be the main risk for Ethereum.

A lot of the other things kind of have already sort of arguably played out for Ethereum. And it would it would have to be something in the stock market. I I think that would cause uh you know, Ethereum to kind of question some of that stuff. So, how far will the stock market drop? I could find evidence for both, honestly. Like, and and again, this is assuming you have a drop in stocks. If you don't have a drop in stocks, then the Ethereum low is highly likely in already if there's no drop in stocks.

So, if there's no drop in stocks in starting in in the next month or two, then the odds of the low being in for Ethereum are, you know, probably like 70%. All right. If you get a 10% drop in stocks, a 25% drop in Ethereum, which we have seen on 10% drops, would would actually print a higher low. it would be printing the same type of thing that it did in 2022, right? Where you get a drop in stocks and then we print a higher low.

If the stock market gets a 20% drop and Ethereum drops by 50%, that's where, you know, you could end up putting in a a slightly lower low, but I wouldn't expect it to be that much that drastically below it would be my guess. Now I can find examples for why it would be 10% or why it would be 20 or even why it wouldn't happen. The main rec the main sort of reconciliation on a 10 sort one of the arguments for just simply a 10% drop is if you look at US interest rates and you sort of go back to the '9s which there's some parallels between uh this rate cycle and the '9s because in the '90s they they lifted rates up kind of like they did over here and then they dropped rates and then after they dropped rates they then raised rates by 25 basis points in March of 1997 And in March of 1997, when the stock when the Fed raised rates 25 basis points, uh the stock market had a correction, but it wasn't very bad.

You know, it wasn't a a major correction. It was just about, you can see starting in February. So, a month before the the rate hike occurred, starting a month, it was about a 10% drop. So if it's a 10 if all it is is a 10% drop and there's no idiosyncratic crazy stuff going on in the cryptoverse then the odds low for Ethereum are considerably higher. If you want to look at, you know, could it be a larger drop? Like could it be, you know, more substantial, take a look at 2018, right?

So, in 2018, the stock market had a about a 10% drop early in the year. And if you look at it in 2026, it was also about a 10% drop early in the year. But then later in the year, in late 2018, it was a 20% drop. So if it ends up being a 20% drop by stocks, what's interesting about a 20% drop is if you look at sort of this trend line that the stock market has been sort of moving up throughout the uh throughout the years.

So let me fix it. So, if you look at that trend line, a 20% drop basically gets you to the trend line. Now, that doesn't mean we can't go up first. I mean, first of all, the stock market could rally first. Maybe it goes all the way up to like 8,000 and then drops 20% or something. I don't know. But that would be kind of like if and when that happens, that's when Ethereum, you know, could could simply get tested. And and the most likely time for it to occur for the stock market, if history is any indication, would be the back half of the back half of the midterm year, right?

So late Q3 kind of going into Q4. You can see in 2018, the low didn't occur until uh late December. by the stock market. So, I think that would kind of be that that risk. And I was trying to think about this of like what, you know, what could it be? And it could be long in rates going up despite their best attempts to try to get it to stay down. Maybe that leads to fear that the Fed's doing the wrong thing. Uh when the market, you know, the market's basically saying you need to raise rates for inflation.

The unemployment rate has been going down. Uh perhaps there's some type of like scary print that occurs later in the year which leads to a stock market correction. I'm not really sure. I I I couldn't tell you exactly why in 2014 there is a stock market correction over there. I know later in 2015 2016 there was recession scares which is what led to those larger drops by the S&P. Um 2018 you can see the S&P had a 20% drop. 2022 it was a 20% drop.

So, I think that's kind of like the risk for Ethereum is just simply there being a correction in the stock market. But I would argue that if there is a correction in the stock market, it would it would simply just do what it caused Ethereum to do last time, right? Like we were rallied up into August, came back down on a stock market correction, but then just continued, you know, back in business. So, that's the argument, right?

We've had a nice rally. If the stock market does get that correction, you know, starting in the next month or so, it could bring ETH back down. And it's the it's the depth of the stock market correction that would then likely dictate the depth of of how far back down Ethereum would go before it would, you know, really start to be back in business and and hopefully begin a a fresh bull market. You can see Ethereum has been testing this level several times throughout the years, like the uh the $1,500 level.

But I will say this, I mean, you know, if the stock market gets that correction and Ethereum comes back down, test some of these levels, it'd be really hard not to be bullish on it, you know, really going into 2027. And there's already precedent for Ethereum bottoming in the summer, right? Like bottoming in June, July. I mean, that's what it did last cycle. So, um, you know, we'll see. We'll see kind of how that how that plays out and and whether Ethereum can can really hold like it did last cycle, right, during I mean, it held last cycle through that stock market correction.

And even though that stock market correction was 20%, it it printed a a um a higher low. Uh, even though it was it was a 50% drop uh by ETH. I mean, a 50% drop by ETH from here would actually get you to a new low, but there's there's a chance that Ethereum might have a little bit further to go. I think in the short term, though, the main area that Ethereum sort of pushing up against is that 200E moving average. That's where Ethereum struggled with back in May and that's where it is right now.

Okay. So, if Ethereum, if the stock market were to get a correction and Ethereum were to sort of stall out here, head back down, and then kind of hold there through the end of the year, it'd be really hard not to then be like, well, that's just kind of setting up for a nice breakout into into 2027. So, that's more or less what I'm thinking for Ethereum. the scarier charts for Ethereum for me uh and why I don't talk about it nearly as much as I used to is that it just keeps bleeding against like other things.

So, if you look at the Ethereum gold valuation, this is the this is like the issue, right? I mean, like we can get excited about these rallies by ETH, but when you look at it against something like gold, you probably can understand like where I'm coming from, right? Like it's hard and and and people gave me a hard time about this with altcoins last cycle because I'm like, "Well, they're just bleeding to Bitcoin." But every time they would rally against Bitcoin, everyone would get mad.

But I'm like, "Guys, they're just bleeding to to Bitcoin." The issue I'm having with Ethereum that I'd like to see change at some point is that it's just been bleeding to gold since 2021. And the lows that were just put in by the Ethereum gold valuation were actually lower than where they were in 2022. So it just makes it not as compelling as it once was when it was generally going up against gold, right? Like it's just been bleeding to gold for essentially the last 5 years.

And and we haven't really seen anything definitively changed just yet. And if you look at it against silver, which by the way, I mean, silver had a massive correction this year, but if you look at it against silver, it's still below where it was in June of 2022. And that's just kind of a crazy thought to say that we are still below the ETH silver valuation from 2022 despite the rally that Ethereum just had. I mean, it really goes to show you just how weak the entire asset class has been.

Now, if you go look at at Ethereum ROI and stuff, like if you were to look at say like the year-to- date ROI of Ethereum, so let's go take a look at that. and you look at 2026 compared to 2022, you can see that Ethereum had a sizable rally, you know, around this time and then it kind of stalled out a little and then it got back in business the following year. And then if you look at 2018, you can see it's diverged some because around this time we had actually went we were dropping rather than uh going up, which is what we're doing now.

And so if you add the average of those two midterm years, you can see the Ethereum is not really tracking it the best it was previously, but this move up does not correspond to the move down we had around this time during previous uh midterm years. And if you measure it from the low or maybe from the peak, if you look at the ROI after the peak for Ethereum, you can see it's gone on pretty long already, right? Like and even if if the low was in the summer, it was only marginally before the the low uh previously.

So, you know, it's a little bit more difficult with altcoins, admittedly. Like if you look at some of these random altcoins like the bare markets just are very different, right? Like for XRP for instance, cycle 2 it took it 800 days to bottom. Uh cycle 3 it took it, you know, 430 days. Cycle one, it took it 350 days. Like it's just so different each cycle. So it's a little bit harder with altcoins to like look at the stuff and and know, you know, how how valid is it?

Bitcoin seems to be a little bit more predictable in that case. Whereas the altcoin market, it's it's a little hit or miss, you know, and so that's why I don't put a lot of of I don't put as much faith into it. If you look at it as measured from the low for Ethereum and go low to the next low, you know, this is the current cycle, right? I mean, it's already lasted well longer than the prior two, even if the low was in July.

But again, that's more of a reflection of just how underperforming Ethereum has been this past cycle that it that it actually did go on far longer than what we saw in uh in the prior ones. And also is because it bottomed earlier, right? It bottomed earlier, but then the issue is that it didn't really I mean it it honestly didn't really accomplish a whole lot this cycle. Ethereum is not that far above again where it bottomed out a full cycle ago.

Trying to think there's anything else and we could look at monthly returns for ETH and see what we have going on there. So in August we're already up about 31%. You can see in 2025 we had a pretty good August and then we just kind of gave it back for the rest of the year. This is not 2025. If you look at it just midterm years. This is definitely the first green August we've had. So hopefully it can stay like that. Um, but again, it's it's a little premature.

If you look at if you look at things like USDT dominance, this is one of those things that we track somewhat closely, you can see that USDT dominance just swept the low. And so, I guess the the concern for Ethereum at the 200E moving average is that if you look at USDT dominance, it set a low in May of 2026 and then now it has swept that low in August. And then if you look at what happened in 2022, there was a low by stable coin dominance right here in May.

And then the low was swept in August during the merge rally. And then stable coin dominance went up basically one more time into November. And then that kind of marked the low for Bitcoin even though Ethereum continued to print a higher low. So that would be kind of the risk here for for ETH is that it it stalls out temporarily at the 200WE moving average, maybe regroups and then pushes through a little bit later, but we'll see.

I mean, a lot of times when you have a rally by Bitcoin or Ethereum and you break through the bull market support band, what happens the very next week is instrumental in helping us to understand whether the low is in or not. Okay. So, what I mean by that is if you look at Bitcoin, this big rally that we just had, you see how it's well above the bull market support band. If we follow through this week, that would make the case for the low being in far stronger, right?

It would look a lot more like the end of 2022 going into 2023. It would look similar to the low printed after the 2018 low as well, where you just get a big move up above the bull market support band. But there are times and you can maybe visualize this with two week candles a little bit better. There are times where you get a strong move like in July 2018 where Bitcoin rallied about 30%. And then in the next twoe candle it just gave it all back.

Okay. And and this time Bitcoin's up about you know 23%. It's above the bull market support band. It was also above it in July 2018 as well. And then we came right back down. So, I'm a believer in this case of let the candles tell us. If there's something to this rally, we shouldn't ignore it, right? And this is why DCANG is the best thing. Shouldn't ignore it. Look to see what the next weekly, the next two week candle does.

Historically, if you see followth through, the odds of the low being in go up considerably. This two-week candle for Bitcoin isn't going to close for another seven days. So you can see in 2019 there was a big twoe candle but then we closed back down and we gave it right back. I'm a big believer in that. Like let the chart tell us in this case if this is meaningful and if it is you would expect to immediately see follow through and not have it stall out.

You would expect to see USDT dominance break down, right? Like if it if it wants to prove that it's different than than 2022, USDT dominance would need to break down right here. And if it doesn't and it just simply bounces like 2022, then what what's likely happening in that case is the stock market correction is playing out, right? The stock market correction plays out and then crypto gets one final drop because of the correction in the stock market and then once the correction in the stock market is over, then stable coin dominance then starts to head back down.

That's the argument, right? So watch stable coin dominance and then watch just to see what Bitcoin does this week. And then for Ethereum, I mean from a you know from a regression point of view, it it's you know it looks fine. Like it looks fairly attractive. It also looked fairly attractive over here in in 2019 and then we had this uh pandemic scare. I'm not calling for a pandemic. Um, but usually when you get like a 10 to 20% drop in stocks, people at least start speculating about recessions, even if there's no longer even if there's not really a recession in sight, that's where people really start to to speculate about it.

And and you know, that happened also in in 2015 as well, where Ethereum had a nice rally and then it came right back into the regression ban on recession fears, even though the recession fears didn't even fully materialize. So, uh, those are my views on Ethereum. You know, I I certainly wouldn't be surprised if the low is in. I I think it's just going to simply I think that will the idea will be simply tested as we get later into Q3 and especially into Q4.

If the stock market correction actually materializes and in the case that stock market correction does not materialize, then absolutely I would think the low is in for Ethereum. If the stock market is only a 10% drop, there is a really good chance that the low is in for Ethereum. If the stock market gives a 20% drop, that's when it could get a little bit iffier for Ethereum. Like if if it if the stock market like reconnects with that trend line down there and drops 20%.

That's where it gets a little iffier as to, you know, as to whether the low is in. But again, like you know, going into 2027, I I wouldn't think it would make a lot of sense to be bearish on a lot of these things. Just how do we how do we finish out the year? Uh so we'll see. Thank you guys for tuning in. Subscribe again. If you're going to the ITC conference, make sure you get your ticket before September 1st as ticket prices are going to go up.

Then thank you guys for tuning in. I will see you next time. Bye.