Jun 15
BTC and ETH have visited their spot price bottom
Translated by Ding HAN
Bitcoin and Ethereum have visited their spot price bottom: BTC $20xxx, ETH $10xx.
Why?
1.ETH on-chain concentrated liquidation area is in $1100 ~ $1250, at present most of these orders got liquidated already or have been withdrawn, and the counterparty, the large capital chooses to directly take these orders and keep the coin, as the market went sideways during the liquidation period, that means the liquidated tokens have not been transferred to exchanges in large volume.
If the large capitals want to bottom fish, on-chain liquidated tokens are a good target. Their liquidation price can be observed on-chain, and they are usually sold at a discount (with a liquidation penalty). Once the large capitals take the liquidated tokens at the concentrated area, ETH also loses the momentum to fall sharply, the large capital instead needs to raise the token price sharply.
2. I launched a voting survey about the bottom prediction of ETH a couple of days ago, most of the people voted for $800, that is, we will have strong support at $1000. BTC also has strong support at $20K, the ATH of the previous bull market.
So from a 6-month spot perspective, you can buy heavily at this zone. What about after 6 months? Can the Fed’s rate hike and taper be as powerful as the ETH 2.0 burning deflation mechanism? The Fed’s interest rate hike and taper are expected to pause by the end of 2023, or at most 2024, but the ETH burning deflation is permanent.
Open the website: ultrasound.money then go to the page: SIMULATE MERGE (simulated 2.0 merger) you can see,
Additional 5.4 million ETH are issued per year before the Ethereum 2.0, 2.9 million ETH will be burned because of EIP 1559, and we get a positive annual inflation rate: 2.1%;
Additional 0.5 million ETH are issued per year after the Ethereum 2.0, 2.9 million ETH will be burned because of EIP 1559, and we get a negative annual inflation rate: -2.1%;
Assuming 1.3 million ETH will be burned by the EIP 1559 per year even on a bear market basis (last 30 days), then the annual inflation rate would be -0.7%.
After each Bitcoin halving, there is a round of bull market, if the ETH issuance is reduced by 90% (equal to 3 times halving), plus the burning, then it will push the inflation rate directly into negative value.
Guess to what price ETH will eventually go up?
After ETH switches to PoS, a large number of ETH will be locked in POS staking and DeFi services, and there is no outflow of funds for mining operations, on the other hand, there will be the inflow of funds brought by freedom of currency + freedom of contract, guess to what price ETH will rise?
ETH burning leader board, the top burning projects are:
NFT, ETH transfer, exchange DeFi, stablecoin, etc.
[Warning] This is a spot-based buying logic, do not rule out the possibility of a short-term fall, BTC to under $20K, ETH under $1000, gamblers, please do not follow this forecast!
============== Q&A =================
Q1: Mr Jiang, are you referring to a short-term bottom or the macro bottom for the year 2022.
Answer: Now it’s the spot price bottom for the next 6 months, that is, if you buy Ethereum at the current zone, you would unlikely to suffer a loss for the next 6 months.
Q2: ETH must die once it turns to PoS as the energy is constant, imagine there is no input, why do you expect the big investors will hold the coin?
A: True, energy is conserved, but mining is not a capital investment, it is a capital outflow instead, while the use of ETH needs (transfer NFT Defi GameFi) requires capital investment.
With a constant input of capital(through the use of burning coins), and no outflow (no mining machine fees), do you think the big investors can hold the coins?
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