Hello everyone, this is EC.
From late June through July, we experienced a full-fledged primary uptrend in crypto, driven by a weakening U.S. Dollar. From the script preview to the execution of the plan, every step has been clearly documented.
However, today, I want to share a different, more cautious perspective: I believe this script may be nearing its end.
I. Reviewing the Script and the "Bubble's" Manifestation
After our call on July 4th that the "main bull wave" was starting, the market perfectly delivered on our expectations. What was more interesting was the clear internal divergence we saw, which precisely confirms our thesis about the "bubble phase" from my June 20th article, "The Restlessness Before the Storm."
When the market's sentiment "balloon" is inflated to its limit, capital flows from the leader (BTC) to assets with higher elasticity (ETH).
The data shows that from July 11th until now, ETH took the baton and rallied approximately 35%, while BTC gained only around 6% in the same period. When BTC is already showing signs of fatigue while ETH is still in a solo rally, that in itself is a major signal that the bubble is nearing its end.
[Attach the BTC vs. ETH comparison chart here, clearly showing the divergence after July 11th]
II. A Shift in the Winds: The Hand Inflating the Balloon is Loosening
I've chosen to end this script at this moment based on signal changes on two levels:
The "External Factor" Shift: The Potential Strengthening of the USD
As I pointed out in my July 28th analysis, "The Market's Rebalancing," the market has entered a phase of "strength-weakness divergence." This trend is now becoming more evident: the U.S. Dollar, cushioned by the extreme weakness of currencies like the Japanese Yen, has begun to show signs of a broad strengthening. Concurrently, U.S. and European stock markets are pulling back in sync, and global risk appetite is cooling.
The external environment that fueled the bubble (a weak USD) is beginning to falter.
The "Internal Factor" Signal: The Needle Point Inside the Balloon
The crypto market itself is also showing warning signs of resistance (see attached ETH daily chart). When the leading asset, ETH, begins to show signs of stagnation and distribution at its highs, it's like the balloon meeting the needle point. The exhaustion of internal momentum is a more direct warning than changes in the external environment.
[Attach the ETHUSD daily chart here to demonstrate the "internal resistance" argument]
III. Conclusion: Don't Be Greedy for the Last Dessert
When the core logic driving the rally (a weak USD) begins to waver, and the market simultaneously shows internal signs of exhaustion, my choice is to end this script and take profits off the table.
This doesn't mean I think crypto will crash immediately. But "no longer suitable to hold" implies that, in my view, the risk/reward ratio at the current level is no longer attractive. A grand feast is coming to an end, and being greedy for the last dessert is not a wise move. Shifting from "buying the dip" to "cautious observation" is the rational choice.
Thank you for your attention and for following along this past month.
#Crypto #BTC #ETH #TradingView #MarketAnalysis #RiskManagement
From late June through July, we experienced a full-fledged primary uptrend in crypto, driven by a weakening U.S. Dollar. From the script preview to the execution of the plan, every step has been clearly documented.
However, today, I want to share a different, more cautious perspective: I believe this script may be nearing its end.
I. Reviewing the Script and the "Bubble's" Manifestation
After our call on July 4th that the "main bull wave" was starting, the market perfectly delivered on our expectations. What was more interesting was the clear internal divergence we saw, which precisely confirms our thesis about the "bubble phase" from my June 20th article, "The Restlessness Before the Storm."
When the market's sentiment "balloon" is inflated to its limit, capital flows from the leader (BTC) to assets with higher elasticity (ETH).
The data shows that from July 11th until now, ETH took the baton and rallied approximately 35%, while BTC gained only around 6% in the same period. When BTC is already showing signs of fatigue while ETH is still in a solo rally, that in itself is a major signal that the bubble is nearing its end.
[Attach the BTC vs. ETH comparison chart here, clearly showing the divergence after July 11th]
II. A Shift in the Winds: The Hand Inflating the Balloon is Loosening
I've chosen to end this script at this moment based on signal changes on two levels:
The "External Factor" Shift: The Potential Strengthening of the USD
As I pointed out in my July 28th analysis, "The Market's Rebalancing," the market has entered a phase of "strength-weakness divergence." This trend is now becoming more evident: the U.S. Dollar, cushioned by the extreme weakness of currencies like the Japanese Yen, has begun to show signs of a broad strengthening. Concurrently, U.S. and European stock markets are pulling back in sync, and global risk appetite is cooling.
The external environment that fueled the bubble (a weak USD) is beginning to falter.
The "Internal Factor" Signal: The Needle Point Inside the Balloon
The crypto market itself is also showing warning signs of resistance (see attached ETH daily chart). When the leading asset, ETH, begins to show signs of stagnation and distribution at its highs, it's like the balloon meeting the needle point. The exhaustion of internal momentum is a more direct warning than changes in the external environment.
[Attach the ETHUSD daily chart here to demonstrate the "internal resistance" argument]
III. Conclusion: Don't Be Greedy for the Last Dessert
When the core logic driving the rally (a weak USD) begins to waver, and the market simultaneously shows internal signs of exhaustion, my choice is to end this script and take profits off the table.
This doesn't mean I think crypto will crash immediately. But "no longer suitable to hold" implies that, in my view, the risk/reward ratio at the current level is no longer attractive. A grand feast is coming to an end, and being greedy for the last dessert is not a wise move. Shifting from "buying the dip" to "cautious observation" is the rational choice.
Thank you for your attention and for following along this past month.
#Crypto #BTC #ETH #TradingView #MarketAnalysis #RiskManagement
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.