Brief Summary
This video discusses Ethereum's recent breakout above $4,000 and what it signifies in the context of previous market cycles. It emphasizes the importance of Ethereum "going home" to its regression band as a prerequisite for bottoming against Bitcoin and initiating a bullish phase. The analysis includes potential future scenarios, such as a likely pullback in September followed by another rally, and how these movements could affect altcoins and Bitcoin dominance.
- Ethereum's breakout above $4,000 is attributed to it bottoming against Bitcoin after reaching its regression band.
- A pullback is expected in September, potentially leading to a consolidation phase.
- Altcoins are currently bleeding against Ethereum, and a rotation back to Bitcoin is anticipated in the September-October timeframe.
Ethereum Breaks $4,000
The video begins by noting Ethereum's breakthrough of the $4,000 mark. The analyst refers to previous discussions on using the ETH/BTC ratio to gauge ETH/USD's bullish potential. A key observation is that each major Ethereum rally has historically coincided with ETH bottoming out against Bitcoin. This pattern was evident in 2016 and 2019, and it appears to be repeating in 2024/2025.
ETH Bottom Against Bitcoin
Each time ETH/BTC bottomed, ETH/USD had reached its regression band, or "gone home". The analyst explains that ETH needed to experience this capitulation on its Bitcoin pair to enable the recent breakout. In previous attempts to break $4,000, there weren't enough buyers, but after "going home," sufficient buying pressure emerged. The video shows that ETH bottomed against Bitcoin in 2016, 2019, and 2025, each time after ETH went home on its USD pair.
Future Expectations and Potential Pullback
The next significant milestone for Ethereum is the prior all-time high around $4,867. Drawing parallels with past cycles, the analyst anticipates a pullback in September. Historically, Bitcoin has been green in July and August during post-halving years (2013, 2017, 2021, and 2025), followed by a red September. The analyst suggests Ethereum might continue its momentum for one to two weeks, potentially reaching the prior all-time highs, before a pullback to around $4,000 in September.
Market Cycle Top Pattern
The analyst describes a common pattern seen at the end of prior market cycles: an aggressive move up, followed by a decline, then another move up to a higher low, consolidation, and finally, the market cycle top before a bear market. He speculates whether the prior all-time high could serve as the initial peak in this pattern. While ETH/BTC looks promising, a pullback is expected around late August, with a higher low forming in September or October. The analyst anticipates a retracement to the 0.5 Fibonacci level, around 0.053, but not in a straight line.
Ethereum Dominance and Altcoin Bleed
Ethereum is currently drawing liquidity from the altcoin market. The analyst argues that this is "Ethereum season," not alt season, as altcoins are consistently losing ground against ETH. He expects this bleed to continue for another one to two weeks, with a potential rotation back to Bitcoin starting around late August, becoming more evident in September. Altcoins' Bitcoin pairs are currently bullish mainly because ETH is rising against Bitcoin.
Rotation to Bitcoin
The analyst believes that when the ETH/BTC rally cools down, altcoins will also cool down, and the rotation will likely be back to Bitcoin in September-October. He cautions against the common belief that alts rally after ETH, noting that they often continue to bleed against ETH instead. The analyst suggests riding the ETH wave for the next couple of weeks, anticipating a September pullback, followed by a potential regrouping and another move up in October.
Potential Scenarios and Bitcoin Dominance
If Ethereum breaks through $4,800 without a pullback, it might indicate an earlier market cycle top. A consolidation period between $4,000 and $5,000 in September would be ideal for a higher market cycle top. The analyst also discusses Bitcoin dominance, suggesting it might rally until late August before dropping again in November, similar to the 2016-2017 cycle.
Final Thoughts and Strategy
Ethereum breaking $4,000 was the expected outcome after it bottomed against Bitcoin by "going home." The analyst reiterates that it doesn't make sense to fade Ethereum currently, as altcoins are bleeding into it, and even Bitcoin is losing ground in the short term. He advises riding the ETH wave for a couple more weeks, expecting a pullback in September, and then looking for a potential move up in October. He concludes by emphasizing that while altcoins may continue to outperform Bitcoin in the short term, this is likely to change in September-October as liquidity flows back into Bitcoin.
