Be Ready

PSA: For current Jarvis AI subscribers, be sure to read our announcement at the end of the issue.

Ethereum looks incredible as it broke above $4,000 this weekend.

For those that missed Friday’s issue title, “Perfect Concoction”, we broke down how ETH flows were looking bullish before the weekend.

The analysis that was written up in that issue has now played out.

Looking forward…

The Livermore Accumulation Cylinder is playing out. For anybody new here you can get up to speed by reading the Grayscale and Chart of the Week sections in our March 8th issue called “Eyes on the Next Altseason” or by taking look at this easy to interpret chart on Tradingview - chart here.

It might seem old because these two resources are now more than two months old, but they are in fact very relevant today.

Now I bring those two resources up because the price action on ETH is likely to continue to outpace bitcoin in this cycle.

Most of the market is eyeing 0.1 ETH/BTC as the checkered flag.

And looking at the chart, this makes sense…

0.1 comes out to be a resistance line left over from the previous bull run. As well as the 0.86-0.885 area, which is also set to create some resistance.

But if we step away from the chart for a minute I think there’s some potential for ETH/BTC to blow past 0.1 in the later stages of this bull run.

That’s because Ethereum’s fundamentals will enable a Wall Street narrative to take root.

In July/August of this year Ethereum will realize an upgrade called London. In the upgrade an improvement proposal called EIP-1559, is likely to be present. This piece of code will alters the inflation of ETH.

Meaning Ethereum’s monetary policy as about to get an upgrade.

If the change take places, ETH has the potential to become a deflationary asset. And in a world where scarcity commands the highest premiums thanks to the insane amount of stimulus sloshing in the system, this deflationary outlook means ETH can command a premium.

This is especially true for high net worth individuals that are using bitcoin to fill this role.

A new narrative is the signal amidst the noise. As soon as we begin to see it unfold in the mainstream media for ETH, the 0.1 price target is no longer an endpoint.

In fact, I don’t even believe the prior weekly closing high price of 0.15 is an end point. This is mainly due to the lack of liquidity taking place with ETH.

If there is significant interest for larger participants to accumulate ETH, there will not be as much to go around like bitcoin.

Unlike other assets, ETH resides on ETH2.0’s Beacon chain (4.5mn ETH), throughout DeFi (10.1mn ETH), and Grayscale (3.2mn ETH). Just these three outlets represent over 15% of ETH in existence.

If that same percentage were to be applied to bitcoin, it’d equal almost 3 million BTC.

This is why we can’t just look at 0.1 as the end point. Any significant moves in ETH will be much more dramatic given how much liquidity is locked up in various smart contracts and Grayscale.

Now, for the next few days…

We have not ruled out the bearish scenario for crypto as a whole.

Right now the $61k price range for Bitcoin is of interest. If we get a close above this price range it’d go a long way towards higher prices. Here’s a Feeding Grounds Whalemap showing some resistance in this area. We highlighted it with a red box.

If we don’t get <$61k, then a retest of recent lows near $50-52k is in the cards.

The main reason we have not adopted the bullish scenario for now is that over the weekend we witnessed significant inflows of altcoins to exchanges. It’s in part why altcoins are down today.

As these inflows happened, bitcoin didn’t budge much.

Additionally, Tether opened up its printer and unleashed a wave of fresh USDT. Which is why we haven’t gone the full blown bear route either.

If anything, this Tether could be used for buying the dip. A steep ETH correction that rebounds faster than any other asset is a scenario that’s very likely.

Until the market gains momentum higher or lower, we continue to remain cautious.

Hopefully you heeded the advice on trimming some profits this weekend in preparation for buying any dip.

We’ll chat some more tomorrow.

Your Pulse on Crypto,

Ben Lilly

P.S. - A quick announcement for new Jarvis AI subscribers… we are extending a limited time offer for annual members to upgrade to lifetime. If you choose to do so, we will prorate the amount of the subscription. Meaning your annual costs will go towards the cost of a lifetime membership.

Remember, our data analytics website ChainPulse is coming soon. With it, we will raise subscription costs for Jarvis AI across the board. So view these current prices like an early access deal.