Blocksmith Says: ETH Forms Big Bottom

12 July 2022

Sometimes it helps to invert a chart to see if it offers more insight that way. Here I have simply reformatted as follows: 1 / Ethereum and 1 / RSI.  So whereas set normally we would be looking at a falling line for ETH, here we see a rising one. 

My first instinct looking at the chart this way is that we are looking at a blowoff top with a massive momentum divergence. Notice ETH has gone vertically up and RSI has followed it. But then the price chop begins and RSI simply doesn’t track as precisely. This is a momentum divergence which, were we actually looking at a top, would be taken as a big warning sign that the highs were unsustainable on deteriorating power.  

Since the data is inverted however, the insight is that a large degree bottom in prices may be forming.   

Christopher Grafton
Christopher Grafton

Chris has been working in the markets for over 15 years variously as a broker, analyst and researcher. He is the author of a well-known book on Hurst cycles analysis, and runs his own market analysis software platform on Bloomberg. He’s also a keen student of both the cello and Brazilian Jiujitsu.

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