Ethereum Update - 10 November 2022

Analysis & Learning Nov 10, 2022
Baked in event risk was more persistent than anticipated. Now stalking a potential reversal out of a 40 day cycle trough. Likely to be a countertrend advance if the call comes off as 80 day cycle is down and a potential headwind.

Analysis: since the last bold recovery call mere days ago - ETH would regain its composure circa 1430 and rally, more FTX event risk kicked and we now find ourselves 265 points lower and no rally. In cycles analysis terms this is an exogenous price shock and typically the cycle rhythm reasserts itself once risk is baked in.

The sharp decline has also reanalysed the cycles and price looks to be at the 40 day cycle trough now and is attempting to stabilise here. However, note that there is a decent shelf just above 1,000 which could act as a near term liquidity magnet 150 odd points lower. The 80 day cycle peak is now confirmed on 4 November and the next trough isn't due until the third week of December.  

An advance to the next 40 day cycle peak circa 1,310 around mid-month is the preferred view, but because the 80 day is falling, we have to consider any coming advance to be countertrend and then back down. With an event tail still out there, we still need to be a bit cautious and wait for some more constructive price action.

Key levels to watch: (1) 10 day FLD circa 1,220 projects to 1,320.  Short FLDs can be traps, so some caution needed, but its a reasonable first aiming point for a potential upside cascade; (2) price could push down to 1,005 / 1,010 and still allow 40 day cycle trough to be called.

Christopher Grafton CMT

Chris has been involved in the markets for 20 years. He is the author of Mastering Hurst Cycle Analysis and is an experienced working technician. Chris holds the CMT qualification.