Hey everyone, I wanted to share my thoughts on the recent Ethereum price action, especially since it just tagged the critical bull market support band after a pretty hefty drop. I know the volatility can be nerve-wracking, but for me, this recent move actually confirms a narrative we've been running with for a while.
Back in August, I felt we were likely to see a 30% correction after the local high, and that's exactly what happened. The drop has occurred, and because of this, I have to flip my immediate bias. My base case now is that Ethereum should find its footing here and rally to new all-time highs. People often get distracted by outside narratives, like talk about tariffs, but honestly, in terms of market cycles, that noise just doesn't matter. We need to focus on what the charts are telling us.
My conviction for this pivot is rooted in the ETH/Bitcoin valuation. We saw it bleed against Bitcoin when the dollar pair hit its high, but it just found a current low right around the 20-week moving average. This pattern is reminiscent of past cycles and suggests Ethereum has been "sufficiently wrecked" for this phase, unlike some other altcoins which put in lower lows against Bitcoin. It’s important to recognize that Bitcoin still leads the market. I expect Bitcoin dominance to remain resilient, potentially spiking up to 64% in October, which is normal for this time of year as Bitcoin aims to prove the bull market isn't over.
While I'm calling for new all-time highs, I always have a contingency plan. I would be willing to admit I was wrong and pivot my view if Bitcoin has two weekly closes below its 50-week moving average. Historically, that's the signal for the end of the cycle. Until then, though, I’m sticking with my base case: the 30% drop is complete, and it's time for Ethereum to surge. I’m hoping to see it hit new highs in the next few weeks!
