Third Quarter Could Prove Difficult for Tier-1 Crypto

It’s fall.

Children are back in school and many families are concluding summer vacations. The business of the third quarter begins in earnest. US corporate earnings, and the 2022 mid-term elections sprint has started. The crypto currency market could use some fall-renewal. Unfortunately, it doesn’t look like tier-1 crypto like, Bitcoin, Ethereum and Solana, will find this quarter accommodating.

The crypto-winter which began in the fourth quarter of 2021 has been brutal with the big three coins having lost on average 70% of their respective market capitalizations. These losses, more so resemble penny stock fluctuations, rather than some of the most innovative financial technologies created since online payment platforms. Within the Financial Tech-Sphere community, much is known about crypto currencies and their perceived utility when it comes to the transfer of money and transaction security. However, their benefits have failed to penetrate the general public’s consciousness, to any large extent, due to the complexities.

Terms like block-chain, crypto wallets, and ledgers cannot be explained like their fiat counterparts. Currently, the public does not need to know how the federal reserve banking system works; or the role The Fed plays when we buy goods and services with a check, credit or debit card. Joe-Public is blissfully unaware of how payments and transactions currently clear. A swipe or a tap nowadays is all it takes to be on our way with whatever is needed.

Maybe there is a Crypto Ambassador of Simplicity out there somewhere, that will reveal themselves soon and usher in that elusive age of mass adoption. In the meantime, these risk assets seem poised to carve out the final machinations of a downtrend that has been both long and devastating for its holders.

Bitcoin (BTC)

Below is the BTCUSD chart in which you will see the most recent price action to include the decline from its highs in first quarter of 2022.

I use Elliott Wave Theory to analyze the price patterns of my firm’s assigned coverage list. This manner of price analysis requires years of practice, and a knowledge of the rules that R.N. Elliot developed back in the 1930’s. According to Elliott’s principles, price patterns develop in impulse five wave structures called motive waves (with the trend) or three wave structures called corrective waves (counter-trend). These patterns play out in fractals of various time degrees to form the long-term bull and bears markets that we experience in all financial assets that trade on an exchange.

A quick observation to the below chart shows we are beginning our final fifth wave descent to complete the larger correction from the 2021 highs. The chart shows that price may finally find a bottom in the range of $15,700 to $10,000. Using Elliott Wave, we can precisely project price’s ultimate target once the June 2022 lows of $17,500 are breached.

Additionally noticeable, this super cycle low could take place in the current third quarter.

Ethereum (ETH) and Solana (SOL) are much in the same place as Bitcoin per the below charts.

I’ll conclude with my opinion being that the tier-1 crypto currencies have a bright future ahead looking into the 2023-2024 timeframe and beyond based on current information. Some believe this latest innovation of financial technology, much like checks, credit and debit cards, will change how society transfers and transacts for goods and services in the future.

However, I do not believe the remainder of 2022 will be kind to their respective valuations. Therefore I advise our members at EWTdaily to not initate new longs within this segment and to be vigilant for potential near-term short opportunities.

Below are my minimum Targets:

Bitcoin (BTC/USD) Minimum Third Quarter Target: $15,700 Current Price $20,600

Ethereum (ETH/USD) Minimum Third Quarter Target: $800 Current Price $1,750

Solana (SOL/USD) Minimum Third Quarter Target: $20 Current Price $35.50

By Chris Maikisch

Lead Analyst , US Indices & Tier-1 Crypto Currency

EWTdaily.com