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Crash Warning Flashing For Ethereum And Bitcoin

Like all signals in technical trading, you can never be sure it will pay off. However, if you get a consistent run of a signal flagging a future move, you have to take it very seriously indeed, especially if it could make or lose you a lot of money.

Way back in time I wrote an article here predicting ether
was going to explode upwards in price. This was because the transaction fees were rising vertically and that meant ether was getting heavy use. Use equals value in crypto. For all the naysayers, crypto has many great use cases and use drives and sustains value for coins and tokens.

It turned out I was spot on because as ether came roaring back from the last crypto winter, transaction costs front ran the increase in price.

So if rising transaction costs make the price go up, what do falling transaction costs do? It’s a leap to say falling transaction costs predict a price fall, but you can be forgiven for seeing this as an obvious extrapolation to rising costs predicting a price rise.

I also wrote a call here using the observation that transaction fees have fallen and low and behold down came ether.

I am not a fan of the platitude that correlation is not causation. I’d modify that saying to “correlation is not causation but don’t bet your life on it.”

So here is the chart and it is for me “make or break time” for the bottom or next leg down. I think we are going much lower, but I let the market tell me and the current trend says we are at a tipping point:

I can see a bottom here, because of the perfect fractal of an even two-stage fall. However, we have a sideways trend in place that is a prelude to a big move in either direction. If you like to trade that is a gift because once that trend is broken you jump on the move and ride it on up/down to the next repricing equilibrium.

Right now ether transaction fees have dropped to levels so low I can’t recall them being this cheap. This seems to have dramatically unfolded over the last week or so. This is an intuition that comes from transacting a fair bit but it is born out in charts like this one from bitinfocharts.com:

It’s a dramatic enough shift in costs downward to suggest to me that the next crypto leg is imminent.

If it comes that will be the bottom.