Ethereum: Why It Is Still “Far From Home” Without a Sustained Bull Run

TL;DR

Ethereum has not begun a sustained bull run because, in the speaker’s view, ETH must first spend time at its “home base”, the lower logarithmic regression band fitted to non-bubble data. Although ETH remained resilient near $1,539, it had not broken out of its range, while reaching fair value without falling would take roughly two years. Read on to understand the key price levels, ETH/BTC risk, and long-term outlook.

Transcript

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Key Insights

• Ethereum's sustained bull runs historically only begin after price spends time at its 'home base', the lower logarithmic regression line fit to non-bubble, apathetic phases where speculative tourists have left the market.
• Ethereum was trading around $1,539 at the time of the video, and its recent upside move looked similar to the October 2022 move without yet breaking out of the established range.
• The fair-value regression line is fit specifically to non-bubble data, isolating apathetic phases to identify Ethereum's true deep value rather than manic bubble peaks.
• Reaching fair value by price staying flat would take roughly two more years for the regression line to rise to current levels, so a downside move to the band would resolve faster.
• Ethereum is considered a blue chip alongside Bitcoin, and the speaker argues 'eth killers' do not exist, viewing ETH as fundamentally more advanced than other altcoins.
• Ethereum has stood the test of time, existing since 2015 (about eight years as of 2023) and holding the number-two position for a long time, likely to remain there.
• The ETH/BTC valuation is mirroring the Bitcoin/USD Wyckoff distribution of 2021, showing a one-two secondary top pattern followed by a slow deterioration into lower highs.
• A strong Bitcoin pump can knock Ethereum off its BTC support, leaving no support to hide behind during the next Bitcoin correction; the 0.065 area is a possible horizontal support zone.

Questions & Answers

Q: Why hasn’t Ethereum started a sustained bull run yet?

The speaker believes Ethereum must spend time at its “home base” before another sustained bull run can begin. That home base is the lower logarithmic regression area fitted to non-bubble data, and ETH was still trading just outside it.

Q: What does “far from home” mean for Ethereum?

It means Ethereum’s price remains outside its lower fair-value regression area. The speaker says Ethereum typically returns to this home base before beginning another sustained bull run.

Q: What was Ethereum’s price at the time of the analysis?

Ethereum was trading at approximately $1,539. Its recent rise resembled the move from October 2022, but it had not yet broken out of the established range.

Q: Why is Ethereum’s fair-value line fitted to non-bubble data?

The model focuses on apathetic periods when speculative tourists have left rather than on manic bubble phases. The speaker believes these quieter periods reveal Ethereum’s true deep value on its USD pair.

Q: Could Ethereum reach fair value without its price falling?

Yes, the regression line could eventually rise to the current price, but the speaker estimates that this would take roughly another two years. He considers a decline into the band, followed by consolidation and a new advance, the less painful path.

Q: Does the speaker consider Ethereum a crypto blue chip?

Yes, the speaker considers both Bitcoin and Ethereum crypto blue chips. He also says there are no “ETH killers” and views Ethereum as more advanced and fundamentally better than other altcoins in many ways.

Q: Why does the speaker consider the ETH/BTC valuation especially important?

The ETH/BTC valuation helps assess the additional risk involved in holding Ethereum rather than Bitcoin. The speaker compares its pattern with Bitcoin/USD’s 2021 Wyckoff distribution, including a one-two secondary top and subsequent lower highs.

Q: What ETH/BTC support level could become important?

The speaker identifies 0.065 as a possible horizontal support area. A strong Bitcoin rally can push Ethereum below its Bitcoin-denominated support, potentially leaving ETH more exposed when Bitcoin later corrects.

Summary & Key Takeaways

• Ethereum sits around $1,539, with its recent rally resembling the October 2022 move but not yet breaking the range. The speaker maintains that a sustained bull market requires ETH to return to 'home base', the lower logarithmic regression line fit to non-bubble data, though ETH has been more resilient than expected.

• The speaker sees it as more likely than not that Ethereum eventually enters the lower regression band, probably breaking to the downside rather than waiting roughly two years for fair value to rise to current price. Coming down, consolidating, then launching again would be less painful and form a new mountain.

• The ETH/BTC valuation is more important as a risk gauge and mirrors Bitcoin/USD's 2021 Wyckoff distribution with a one-two secondary top. ETH has broken diagonal support against Bitcoin; pumps serve to lure FOMO buyers before breaking down, with 0.065 a possible horizontal support area.