ETH x Binance Legacy Chart: the road to 10K
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For today a very special Ethereum chart: the complete history of ETH on Binance! A chart of almost 4 years of price action of Ethereum (soon to be the biggest cryptocurrency) and Binance; the exchange that was very small on the 17th August 2017 (where this chart starts) and now the biggest CEX. Do you see the link here?
Ok, some bold claims, lets dive into Ethereum, Bitcoin and the crypto market as a whole with an indepth analysis of why, how, what and when. Remember; this analysis is purely educational and reflects my opinion and it is meant for an open discussion on the topic and not as financial advice.
Why is Ethereum market leader?
Ethereum is the infrastructure blockchain of the crypto space, it represents the most adoption, usage, transactions / fees and (in my opinion) soon the highest market cap. The reason is because Ethereum became the standard and benchmark blockchain in the space because of its revolutionary technology and team of developers who built it over the years. This makes ETH the most attractive blockchain to use for developers for the following reasons:
- Decentralization (this is what crypto is for, missing this piece kills the whole point)
- High security / trustworthy
- Biggest adoption in the market (standardization)
- Compatibility (for numerous use cases; wallets, exchanges, tokens etc.)
- Biggest developer community
- Layer 2 scaling and performance solutions
With the following downsides: performance and scalibillity.
Now you might think; well, how I should I care; I am an investor/trader, not a developer. Well, my answer to that is; you are a tech investor / trader by investing in crypto; therefore technology will always be the main driver of the market - not hype. So in the end its simple; the best tech wins and for now; that best tech is Ethereum. Sure, there are many promising competitors but they are miles behind and will need years to get even close to what ETH has accomplished.
So, if the market is tech driven, we need to side with developers. So if developers choose Ethereum, we should do the same. However, that is not to say to not be exposed to any other coin or to say competitors are worse or would not be able to compete with ETH; that is just to state the status quo and the projection of at least a few years ahead: Ethereum is market leader.
How will Ethereum develop?
We all know about the ridiculous gas fees and performance issues around Ethereum (and even Bitcoin). The reason is simple; proof of work has been the first standard set to decentralize networks and to incentivize participants to maintain the network's trust and security in real time (lets call it 1G). Now, however; there is a more effective way to tackle this problem; proof of stake (lets call it 2G) with more performance, security and efficiency. This is why a lot of new infrastructure blockchains have a better performance ratio than Ethereum and why some may think; those chains will outcompete ETH.
I do not think that will happen soon, it may happen somewhen in the future but I don't see it happening in the coming 3 years but maybe not even within 5 years from now. Given I don't have a crystal ball to look into the future; 5 years is my max range. So first off; Ethereum has a bunch of upgrades coming to improve performance and scalability. This will be challenging because they need to replace the engine of their cars while keeping the car running on the road. A potential risk indeed however the perfect test for vigilance of the team and network itself to prove my 5 year projection. If they pull off ETH 2.0 without major problems and they have significantly improved their performance and scalability; a new era for ETH has opened. So lets quickly go over the updates:
- Beacon chain: staking mechanism for ETH 2.0 (implemented on December 1st, 2020)
- Berlin Fork: reducing gas fees - successfully implemented on April 16, 2021 and gas fees are down already.
- London Fork: transaction focused; fees + deflationary ETH through token burn (coming July 2021)
- Shard chains: scalability, performance and POS transaction protocol for ETH 2.0
- The Docking: Implementing the Beacon and Shard chains and live is ETH2.0 with proof of stake (2022)
The upgrades above are the most important steps for ETH becoming fully proof of stake and a deflationary cryptocurrency. By doing so, ETH elimenates scalability and performance issues and will evolve inflationary ETH1.0 into deflationary ETH2.0.
What will change for the price of Ethereum?
The consequence of the innovations will be simple; the price of ETH will go up. That is, if all implementations are successful and there is no sudden hard fork forced by an error around implementing any of the new protocols. There is always a risk involved with these upgrades and if they fail; a lot of damage can be done to the network and the ETH price.
However, given the team's expertise, experience and their history of many successful upgrades and hard forks in the past; there is no reason to believe they can not pull it off. However, I just want to mention this risk as nothing in life is risk free.
So lets dive into the chart; as you can see we had two major bull runs for ETH; one in 2017 and one ongoing right now. The ATH of 2017 was around 1400$, right now we just did 2x of that; so we aren't close to the top in my opinion but again, everybody to their opinion and analysis but here is mine...
The 2017 bull run was insane, no one would have believed in a 1400$ ETH but there it was! Now I see a similar and even stronger parabola playing out; the difference being that 2017 was pre-adoption and we are now in the early-adoption phase. A very important is example of that is that ETH is finding early adoption in Defi with selling EU bonds through digital notes through the Ethereum blockchain. You would never see the European Investment Bank come even close to crypto in 2017, let alone actually using it. So that's the main difference between 2017 and now and in my opinion more of such adoptions will follow if the above upgrades and test cases from the EIB are successful.
Technical analysis
I have to say, I had many difficulties potentially finding a top Ethereum, especially at times when everyone was bearish due to the high gas fees and the success of BSC. When I dove back into charts and the fundamentals however; a much clearer picture comes to light.
I drew two Gann fans one for the 2017/2018 parabola and one of the 2020/2021 parabola. Point of interest is the blue support line of the 2017/2028 run with 3 touch points; support for the start of the parabola, support for a new run up and the start of the bear market. The inflationary pressure combined with the bear market gave us a damn good entry on ETH; with an absolute low of around $85 just over one year ago (!). Times have changed so fast!
From that bottom we have rallied over 4000% to the current price level of around the historical number of $3300. This week we had an historical breakout (!) but first let's get into the numbers of the current bull run thus far. On April 7th we broke out of the triangle formation with a breakout target of 1475$ (purple line) - perfectly aligned with the first "top" and major resistance during this run. The end? No, because at that point we effectively formed a double bottom with a new breakout target of around 2500$. The second "top" that came so suddenly only a few weeks back and was again met with heavy resistance that threw ETH back to around 2150$. The end? No, ETh reversed upwards immediately and rallied to current levels with unbelievable ease. So right now, one would ask again; the top?
No, not in my opinion and yes I can throw all the fundamental reasons above (thats 1) but (2) there have been multiple technical indicators flashing big time! The first one that flashed was the ETH/BTC valuation that broke a key resistance and the BTC dominance that broke below 50. These two signals created an historical pivot in the crypto markets forever. (no one is writing about it because no one realizes the implications, yet!) These are that:
- Bitcoin is no longer the major and the hedge for crypto against crypto (nothing changed against fiat)
- Ethereum is from now on the crypto hedge (portfolios should be valued in ETH)
- Altcoins no longer exist and we should get rid of this word (the majority of coins cant be called alternative)
You can read more about this in my previous analyses on ETH and BTC:
ETH/BTC analysis: the historical breakout
BTC vs ETH dominance: the historical pivot
When will Ethereum hit 10K?
This brings us to the last question in this analysis; when will ETH hit 10K? So obviously we have to watch out with these projections because I mentioned the risks above and nothing is guaranteed. But if we are optimists, which investor is by making an investment, the questions is not if Ethereum hits 10K but when?
Back to chart, so we just talked about the blue support line of the 2017/2018 bull run - normally not really interesting for now right? Well no, because we just broke back into our 2017/2018 bull channel, which is insane! If we hold this trendline as support which I project we will do; we can see ETH doing another 3x from here. If we look at the parabolic structure we also broke a 3 year old resistance level and we are now in full price discovery, this is untouched terrain.
So my projection is that when the markets stay healthy and nothing bad happens to ETH for whatever reason; Ethereum can rally to 10K by the end of 2021 or in the most bullish scenario: already be at 10K in July 2021! The purple box is the one we should look out for and I would like to see ETh hitting the heart in July 2021 and hit 10K before the end of the year.
This would not only be great for us investors but this could (potentially!) catapult the price of Ethereum even further! Why? Because it could (not should) mean that Ethereum has flipped Bitcoin in market cap. Something which I expect to happen within the next 2 years. Please refer to the above analyses about the ETH and BTC dominance because its easy to make assumptions about me or this analysis but in there you find why. In short:
Blockchain about technology built on a network that is decentralized and trustless.
And that is exactly what Ethereum provides. The utility and adoption of the blockchain technology is what drives the price of a digital asset. For Bitcoin that is store of value and it is (by far) the best fiat hedge there is right now; with diminishing risks and returns it has become the perfect digital gold. And to add to that; I believe the BTC price will still go up substantially given the upcoming inflation wave. However; it will no longer beat Ethereum, as Ethereum is the fundament for blockchain technology - just like Microsoft was to the personal computer.
Welcome to a new era of crypto; welcome to the era of Ethereum.
IMPORTANT: this is not financial advice, trade or invest based on your own risk and research.
Ok, some bold claims, lets dive into Ethereum, Bitcoin and the crypto market as a whole with an indepth analysis of why, how, what and when. Remember; this analysis is purely educational and reflects my opinion and it is meant for an open discussion on the topic and not as financial advice.
Why is Ethereum market leader?
Ethereum is the infrastructure blockchain of the crypto space, it represents the most adoption, usage, transactions / fees and (in my opinion) soon the highest market cap. The reason is because Ethereum became the standard and benchmark blockchain in the space because of its revolutionary technology and team of developers who built it over the years. This makes ETH the most attractive blockchain to use for developers for the following reasons:
- Decentralization (this is what crypto is for, missing this piece kills the whole point)
- High security / trustworthy
- Biggest adoption in the market (standardization)
- Compatibility (for numerous use cases; wallets, exchanges, tokens etc.)
- Biggest developer community
- Layer 2 scaling and performance solutions
With the following downsides: performance and scalibillity.
Now you might think; well, how I should I care; I am an investor/trader, not a developer. Well, my answer to that is; you are a tech investor / trader by investing in crypto; therefore technology will always be the main driver of the market - not hype. So in the end its simple; the best tech wins and for now; that best tech is Ethereum. Sure, there are many promising competitors but they are miles behind and will need years to get even close to what ETH has accomplished.
So, if the market is tech driven, we need to side with developers. So if developers choose Ethereum, we should do the same. However, that is not to say to not be exposed to any other coin or to say competitors are worse or would not be able to compete with ETH; that is just to state the status quo and the projection of at least a few years ahead: Ethereum is market leader.
How will Ethereum develop?
We all know about the ridiculous gas fees and performance issues around Ethereum (and even Bitcoin). The reason is simple; proof of work has been the first standard set to decentralize networks and to incentivize participants to maintain the network's trust and security in real time (lets call it 1G). Now, however; there is a more effective way to tackle this problem; proof of stake (lets call it 2G) with more performance, security and efficiency. This is why a lot of new infrastructure blockchains have a better performance ratio than Ethereum and why some may think; those chains will outcompete ETH.
I do not think that will happen soon, it may happen somewhen in the future but I don't see it happening in the coming 3 years but maybe not even within 5 years from now. Given I don't have a crystal ball to look into the future; 5 years is my max range. So first off; Ethereum has a bunch of upgrades coming to improve performance and scalability. This will be challenging because they need to replace the engine of their cars while keeping the car running on the road. A potential risk indeed however the perfect test for vigilance of the team and network itself to prove my 5 year projection. If they pull off ETH 2.0 without major problems and they have significantly improved their performance and scalability; a new era for ETH has opened. So lets quickly go over the updates:
- Beacon chain: staking mechanism for ETH 2.0 (implemented on December 1st, 2020)
- Berlin Fork: reducing gas fees - successfully implemented on April 16, 2021 and gas fees are down already.
- London Fork: transaction focused; fees + deflationary ETH through token burn (coming July 2021)
- Shard chains: scalability, performance and POS transaction protocol for ETH 2.0
- The Docking: Implementing the Beacon and Shard chains and live is ETH2.0 with proof of stake (2022)
The upgrades above are the most important steps for ETH becoming fully proof of stake and a deflationary cryptocurrency. By doing so, ETH elimenates scalability and performance issues and will evolve inflationary ETH1.0 into deflationary ETH2.0.
What will change for the price of Ethereum?
The consequence of the innovations will be simple; the price of ETH will go up. That is, if all implementations are successful and there is no sudden hard fork forced by an error around implementing any of the new protocols. There is always a risk involved with these upgrades and if they fail; a lot of damage can be done to the network and the ETH price.
However, given the team's expertise, experience and their history of many successful upgrades and hard forks in the past; there is no reason to believe they can not pull it off. However, I just want to mention this risk as nothing in life is risk free.
So lets dive into the chart; as you can see we had two major bull runs for ETH; one in 2017 and one ongoing right now. The ATH of 2017 was around 1400$, right now we just did 2x of that; so we aren't close to the top in my opinion but again, everybody to their opinion and analysis but here is mine...
The 2017 bull run was insane, no one would have believed in a 1400$ ETH but there it was! Now I see a similar and even stronger parabola playing out; the difference being that 2017 was pre-adoption and we are now in the early-adoption phase. A very important is example of that is that ETH is finding early adoption in Defi with selling EU bonds through digital notes through the Ethereum blockchain. You would never see the European Investment Bank come even close to crypto in 2017, let alone actually using it. So that's the main difference between 2017 and now and in my opinion more of such adoptions will follow if the above upgrades and test cases from the EIB are successful.
Technical analysis
I have to say, I had many difficulties potentially finding a top Ethereum, especially at times when everyone was bearish due to the high gas fees and the success of BSC. When I dove back into charts and the fundamentals however; a much clearer picture comes to light.
I drew two Gann fans one for the 2017/2018 parabola and one of the 2020/2021 parabola. Point of interest is the blue support line of the 2017/2028 run with 3 touch points; support for the start of the parabola, support for a new run up and the start of the bear market. The inflationary pressure combined with the bear market gave us a damn good entry on ETH; with an absolute low of around $85 just over one year ago (!). Times have changed so fast!
From that bottom we have rallied over 4000% to the current price level of around the historical number of $3300. This week we had an historical breakout (!) but first let's get into the numbers of the current bull run thus far. On April 7th we broke out of the triangle formation with a breakout target of 1475$ (purple line) - perfectly aligned with the first "top" and major resistance during this run. The end? No, because at that point we effectively formed a double bottom with a new breakout target of around 2500$. The second "top" that came so suddenly only a few weeks back and was again met with heavy resistance that threw ETH back to around 2150$. The end? No, ETh reversed upwards immediately and rallied to current levels with unbelievable ease. So right now, one would ask again; the top?
No, not in my opinion and yes I can throw all the fundamental reasons above (thats 1) but (2) there have been multiple technical indicators flashing big time! The first one that flashed was the ETH/BTC valuation that broke a key resistance and the BTC dominance that broke below 50. These two signals created an historical pivot in the crypto markets forever. (no one is writing about it because no one realizes the implications, yet!) These are that:
- Bitcoin is no longer the major and the hedge for crypto against crypto (nothing changed against fiat)
- Ethereum is from now on the crypto hedge (portfolios should be valued in ETH)
- Altcoins no longer exist and we should get rid of this word (the majority of coins cant be called alternative)
You can read more about this in my previous analyses on ETH and BTC:
ETH/BTC analysis: the historical breakout
BTC vs ETH dominance: the historical pivot
When will Ethereum hit 10K?
This brings us to the last question in this analysis; when will ETH hit 10K? So obviously we have to watch out with these projections because I mentioned the risks above and nothing is guaranteed. But if we are optimists, which investor is by making an investment, the questions is not if Ethereum hits 10K but when?
Back to chart, so we just talked about the blue support line of the 2017/2018 bull run - normally not really interesting for now right? Well no, because we just broke back into our 2017/2018 bull channel, which is insane! If we hold this trendline as support which I project we will do; we can see ETH doing another 3x from here. If we look at the parabolic structure we also broke a 3 year old resistance level and we are now in full price discovery, this is untouched terrain.
So my projection is that when the markets stay healthy and nothing bad happens to ETH for whatever reason; Ethereum can rally to 10K by the end of 2021 or in the most bullish scenario: already be at 10K in July 2021! The purple box is the one we should look out for and I would like to see ETh hitting the heart in July 2021 and hit 10K before the end of the year.
This would not only be great for us investors but this could (potentially!) catapult the price of Ethereum even further! Why? Because it could (not should) mean that Ethereum has flipped Bitcoin in market cap. Something which I expect to happen within the next 2 years. Please refer to the above analyses about the ETH and BTC dominance because its easy to make assumptions about me or this analysis but in there you find why. In short:
Blockchain about technology built on a network that is decentralized and trustless.
And that is exactly what Ethereum provides. The utility and adoption of the blockchain technology is what drives the price of a digital asset. For Bitcoin that is store of value and it is (by far) the best fiat hedge there is right now; with diminishing risks and returns it has become the perfect digital gold. And to add to that; I believe the BTC price will still go up substantially given the upcoming inflation wave. However; it will no longer beat Ethereum, as Ethereum is the fundament for blockchain technology - just like Microsoft was to the personal computer.
Welcome to a new era of crypto; welcome to the era of Ethereum.
IMPORTANT: this is not financial advice, trade or invest based on your own risk and research.
ノート
(excuse me for the typo's)ノート
ETH UPDATE: we hit 4K and we are right on track for 10K in July! Doesnt look so unrealistic anymore does it? ;) Also if we ETH would do what BTC did in 2017, we can expect ETH trading above 20K by the end of this year... <3 (first lets hit 10K!)
Important update on Twitter on 10x Club, a weekly newsletter curated by me containing research & analytics on the crypto market & the amazing opportunities during the bear market - Check my Twitter or website link below:
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