Blocksmith Says: Gold Shows That Sh*t Just Got Real in Crypto

16 September 2022

We have looked at the strong correlation between crypto and Gold in previous notes. Yesterday we saw that ETH new 80 day cycle peaked at the very bottom of the projected range and very early. This is bearish! When cycles top out early we know two things: firstly that longer cycles are pushing down hard and secondly that the next trough will be pushed forward in time. In cycles speak, this is called “translation”.  

The chart shown today is Gold basis weekly data. What happened in yesterday’s session was that the March 2021 low, ostensible support, just got sliced through as if it wasn’t there. This means the market just threw in the towel. Some analysts call moves like this and at this stage the “point of recognition”.  This is where unless you were dropped on your head as a baby, you can no longer reasonably hold the view that price will go up.   

The all important factor now is the falling 18 month cycle.  This cycle peaked in March and is not due to bottom until November / December and probably around 1500.  Could be later, could be lower, but the gist is down and down hard.  Hedge accordingly. 

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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