Stormrake - Insights #Ethereum

Ethereum: The “Digital Oil” of the Modern Age

Wed, 06 Aug 2025 16:27:40 +1000

Since the last bull run in 2021, Ethereum (ETH) has undergone a quiet transformation. It is no longer just a smart contract plaƞorm for DeFi experiments and NFT collectibles – it’s steadily becoming the core infrastructure layer for stablecoins and tokenized real-world assets (RWAs), the bridge between traditional finance (TradFi) and blockchain ecosystems.

This shift is ushering in a new era where institutions, governments, and fintech plaƞorms are turning to Ethereum for asset issuance, settlement, and liquidity. To put it simply, it is already reshaping the way global value flows across markets.

Ethereum’s Growing Role in Stablecoins

Stablecoins are digital tokens that track the value of fiat currencies like the US dollar. They are critical for crypto trading, remittances, cross-border settlements, and as a hedge against crypto market volatility. Among the vast number of blockchain plaƞorms available today, Ethereum remains the dominant home for stablecoins.

Major stablecoins like USDC, USDT, DAI, and PYUSD are primarily issued on Ethereum, taking advantage of its security, composability, and widespread developer support. In fact, more than 60% of stablecoin transaction volume flows through Ethereum’s mainnet or Layer 2s. Why? Because Ethereum offers the best blend of decentralization, scalability, and regulatory flexibility for stablecoin issuers and users alike.

Institutional adoption is reinforcing this trend. Visa has begun settling cross-border payments using USDC on Ethereum. PayPal’s PYUSD – their very own dollar-backed stablecoin is launched as an ERC-20 token on Ethereum. These moves highlight Ethereum’s role as the settlement layer for digital dollars, which could soon be the on-chain equivalents of real-world fiat currencies.

Tokenizing Real-World Assets on Ethereum

Beyond stablecoins, Ethereum is becoming the go-to network for tokenizing real-world financial assets, including but not limited to; U.S. Treasuries, private credit, gold, and real estate.

This trend, known as Real World Asset tokenization, or simply RWA allows traditional assets to be represented as tokens on a blockchain. These tokens can then be traded, borrowed against, or used in DeFi protocols. Ethereum’s security, smart contract flexibility, and mature infrastructure make it the obvious foundation.

A few high-profile examples include:

BlackRock’s BUIDL tokenized U.S. Treasury fund, which runs on Ethereum
Franklin Templeton’s tokenized money market fund, issued as an Ethereum-based token
Ondo Finance, which tokenizes U.S. Treasury yields and allows investors globally to gain exposure through Ethereum wallets

This movement turns Ethereum into a compliance-aware, globally accessible financial operating system - something that didn’t exist in TradFi or crypto just a few years ago.

What’s Changed Since the 2021 Bull Run?

Several key upgrades and ecosystem developments since 2021 have paved the way for Ethereum’s integration with traditional finance:

The Merge (2022) - Ethereum transitioned from proof-of-work to proof-of-stake, cutting energy use by over 99% and aligning with ESG mandates, making it more palatable to institutional allocators.
EIP-1559 (2021) - Introduced a burn mechanism that removes a portion of ETH used in transaction fees, especially during high network activity. This has created periods of deflationary pressure on ETH supply, in-turn making it scarcer with better supply vs demand token-omics
EIP-4844 (2024) - Enabled proto-danksharding, which significantly lowers data costs for Layer 2 rollups, making Ethereum-based applications more scalable and affordable for users and enterprises.
Explosive Growth in Layer 2s - Networks like Arbitrum, Optimism, and Base now host major stablecoin and RWA projects, thanks to lower gas fees and Ethereum-grade security. These rollups settle back to Ethereum mainnet, reinforcing ETH's position at the center.
Better Institutional Tooling - Solutions like Fireblocks, Chainlink CCIP, and KYC-enabled smart contracts have matured to meet the compliance needs of financial firms operating on-chain.

How This Affects ETH’s Price and Long-Term Value

Ethereum’s growing use as infrastructure is not just technical, rather it has clear implications for ETH, the underlying asset.

ETH as Fuel: Every stablecoin or RWA transaction on Ethereum or its Layer 2s burns a bit of ETH through gas fees, especially during periods of high activity.
ETH as Collateral: As stablecoin and RWA protocols grow, they increasingly rely on ETH for liquidity, governance, or backing.
ETH as Staked Capital: Institutions and individuals alike are staking ETH to earn yield, locking up supply and reducing sell pressure.

The combination of growing demand (for usage and staking) and declining issuance (due to burns and locked tokens) is seƫng ETH up for strong upward price pressure. Unlike speculative altcoins, ETH is building deep, real-world utility – now with institutional and retail investors noticing.

Ethereum Is Becoming the Internet Bond Layer

As stablecoins and RWAs move on-chain, Ethereum is not just keeping up - it’s becoming the standard. The network has evolved from a DeFi sandbox into the core infrastructure for institutional-grade digital finance.

This transformation means that ETH acting as both the fuel and the foundation of this new economy, it’s well positioned and quickly becoming the “digital oil” and reserve asset of a programmable financial future.

If Ethereum continues on this path, its relevance in global finance will grow dramatically, and in-turn so will the value of its native asset. Such as with ETH’s current price action, we just witnessed July give us an explosive rally over 65% from trough to peak for the month.

Source:https://www.tradingview.com/x/WAIVuQm7/

From a low of $2,400 to a local peak just over $3,900, we’ve got the definitive confirmation that we needed on the charts now; the bottom is in. Trend has reversed back up with extreme buying volume, mostly consisting of Institutional ETF inflows, of which are breaking records daily now. Smart money is loading up the truck and they aren’t slowing down. Despite the recent liquidation sell off over the last few weeks, aimed at shaking out over-leveraged retail traders (a good thing), we are definitively now in an uptrend on all major timeframes, especially with that bounce overnight regaining local trend support.

In the short-term, we’re targeting a small retrace back down to $3,546 in order to keep building up support as we see things creep up higher.

Source:https://www.tradingview.com/x/FQnfQVDu/

I suspect once we tag this short-term trend support, it will give us the solid structure we need to start pushing the ever-elusive $4,000 resistance zone that ETH has been stuck under all Bull run, however this time, with the expected late stage liquidation sell-off behind us, and Bitcoin Dominance continuing to fall (as outlined in previous articles) the timing of an Alt season combined with ETH’s resurgence isn’t a coincidence. We strongly believe it’s time to break through the $4,000 barrier sooner rather than later and into new All Time High’s.

Exciting times ahead to be sure. Keep a close eye on the charts and keep an eagled-eye out for more of our incoming articles over the coming weeks and months, because this train is about to get certified crazy sooner rather than later! (in all the right ways!)

Written by James Ryan

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Stormrake is not a financial adviser and does not provide financial product advice. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances. Stormrake is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by this newsletter.

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Trump’s Tariffs + Trend Chop=Trading Opportunity

Sat, 15 Feb 2025 14:06:14 +1100

Since my last analysis on Christmas Eve 2024, after the massive wave of volatility post-US elections, the markets have since made the well-adjusted decision to take the needed time to cool off and enjoy some breathing room as we outlined then would be a likely possibility. This has allowed the market participants that have been Bullishly long since early in this cycle to not only take advantage of all the mounting positive narratives for Cryptocurrency, such as the deluge of Institutional Investment and unprecedented ETF inflows that have been building up over the last few years, but also seizing this current mid-cycle correction phase to provide ample opportunity in reallocating capital to undervalued positions and ensuring our strategies remain well-poised in maximizing gains ahead of the upcoming Altcoin Season.

With recent volatility pertaining to a few curveballs such as; the surprise announcement of China’s DeepSeek AI, rocking the foundations of US-based AI companies and NASDAQ heavy-hitters such as Open AI and Nvidia who’ve built businesses around limitless spending budgets and boundless excess of capital derived from the notion that “more spent = better results,” now with China swooping in and undercutting their competitors with a viable Open Source solution that’s up-to-speed meeting market demands at a fraction of the cost, it’s no surprise that the recent manic over-valuations of some of these US companies led investors into a selling frenzy realizing that these once “safe-bets” a mere twelve months ago are now being threatened simply by the free-market finding opportunity via inefficiency, thus creating viable competition. Ultimately this is all very good for the technology ecosphere in the long run, however; yes – the market needed its medicine when Nvidia’s overblown P/E Valuations were sustaining a figure above 40.0, which for the Stock Trading enthusiasts know this is deep in the over-valued territory where a sudden steep and sharp correction becomes an inevitability sooner rather than later, which we’ve now got.

This of course, spilled over into the Cryptocurrency sector and solidified our prediction that a mid-cycle correction of sorts would likely commence here started to ring true. Combined with Trump’s inevitable Tariff Shock to the broader markets, it’s clear that we’re in a deluge of uncertainty right now, however nothing fundamental has changed for the markets; mainly newer retail participants just don’t like uncertainty and tend to overreact in the short-term. Based on all the positive political shifts and executive orders Trump’s signed in the wake his inauguration combined with his feverishly bullish plan to make the United States of America the world leader for all things Crypto, there’s no doubt where this industry is heading in the future in my eyes. Let’s take a look at the charts and see what price levels we’ve needed to respect in the meantime, and where we will be going thereafter once out of the storm.

In our previous article in December, after hitting our $102K target for Bitcoin, we called for a well-deserved retracement as we stated “nothing goes up in a straight line forever.” This couldn’t have been more fortuitous, as since then Bitcoin hasn’t been able to trade consistently above that Fibonacci extension target without being sold-off consecutively each week. We noted that there were two primary entry points we were looking for when coming back down on the weekly time-frame that were also ascertained using Fibonacci’s sequence, again looking at likely psychological price levels that we could retrace back down to. Our first level at 0.236% tagged around the $96,500 mark early on, however, it was our predicted optimal level of 0.382% level sitting at a price of $89,400 where our ideal retracement level was that price ultimately came to test and hold and has been holding ever since.

A clearer view of the chart can be found here:https://www.tradingview.com/x/B9CMVoUb/

While price chopped along sideways in a channel for some time, we blocked out the noise and remained steadfast that this level would tag in some way, shape, or form, and that day came on Jan 13th in the lead-up to a forecasted “hotter-than-expected” CPI print of 2.9% Year-on-Year, +0.2% greater than previously anticipated. This gave the market the extra little bit of uncertain push back to the downside that we were hoping for, albeit still holding trend, therefore giving us a nice setup and bounce higher that came in the following days before the announcement of DeepSeek AI.

Since the eventual panic sell-off from not only DeepSeek AI challenging the overblown valuations of the US AI Sector, but also now with Trump’s 25% Tariff shock to Canada, Mexico and now being discussed which other non-US nations will need to be subject to these extra economic buffers, it was only natural that the market has priced this in and remains somewhat “choppy” and stagnant with prices mostly sideways across the board until we clear these high seas of uncertainty into clearer waters. With that being said though, in terms of Price Action, we have held what we’ve needed to, and maintained the overall uptrend that has gotten us to these eye-watering prices in the first place.

A clearer view of the chart can be found here: https://www.tradingview.com/x/l86DJqrX/

As you can see, despite the narratives that seem to just keep on coming, despite the relentless nature and wild swings of the market, Bitcoin is determined to hold the $90K line in the sand and Local Uptrend on higher-timeframes; a good sign that this is all just noise and won’t permeate into a larger and broader sell-off. The Local Trend needs to hold here (green box) to keep momentum relatively high in the medium term so that we push into fresh All Time Highs later this cycle, however, if we do end up getting a Weekly or a Monthly close below the green box zone, then we will be looking at yet another broader re-accumulation phase (similar to what happened between March – September 2024), in order to re-gain buying momentum before attempting to head higher.

Whilst we expect to see Bitcoin trailing higher once it’s ready to sustain consistent buying volume and reduced selling beyond the current $102K Resistance zone, given that historically in the first half of a Bulllrun we usually see Bitcoin lead the charge, it’s the second half of a Bullrun where BTC dominance starts to fall off, giving way to the meteoric rise of Altcoins, like we saw in cycles past. As is true for all trading opportunities, this can even be charted and critiqued using Trend Analysis and our understanding of Price Action to determine where a likely trend reversal will come in, paving the way for Alts to reign supreme again. Currently, BTC dominance has remained consistently in an uptrend since the beginning of 2023, in-line with the beginnings of a bottom forming from the FTX crash in Q4 2022.

A clearer view of the chart can be found here: https://www.tradingview.com/x/1HSdsNJi/

As Bitcoin is the grandfather of all Crypto currencies, the relationship it has relative to how the entire Crypto industry will perform as a whole later on in the cycle cannot be underestimated. However, at a certain point during a Bullrun, usually happening once Bitcoin has breached into fresh new All Time High territory in USD, often when that first major mid-cycle correction kicks in (like what we’re experiencing now!) that’s typically when BTC whales and eagle eyed market participants look at reallocating their holdings into undervalued and underperforming Altcoins in order to make the remainder of their gains seeing that Bitcoin has already done most of its rally up until this point thanks to the law of diminishing returns. Upon closer inspection, we can see BTC dominance last Bull cycle during 2021, Bitcoin reached a market saturation peak at 73.63% in December 2020, again aligning with when it started breaking above $20K USD for the first time since the 2017 Bullrun, beginning the printing of fresh highs that would last all the way until November of 2021. The question then remains – where do we see BTC Dominance topping this current cycle? Well again, thanks to the law of diminishing returns as the overall plethora of Cryptocurrencies, memecoins and broader umbrella of Web 3.0 assets available to market participants each and every cycle keeps growing, it’s unlikely we’d see the peak at those levels again, in-fact if we trade the trend on the basis that BTC.D will keep making lower macro highs on higher timeframes as a result like it’s always done given the above, I’d expect to see this cycles resistance coming in around the 60-65% zone, of which we’ve tagged twice now in the recent months and rejected off of both times. This further gives credence to the idea that whilst BTC will continue trailing higher from here nominally in USD prices, it’s performance compared relatively to its Altcoin counter-parts will start to dwindle until this cycle has reached its peak.

Speaking of undervalued and underappreciated heavy hitters in the space currently, Ethereum has remained stable yet consistently low on buying volume for the entire duration of this current Bullrun for the time being. This meant that while the sell-offs that came for the entire broader market also came of ETH naturally, as its not vastly overvalued yet like it has been in cycles prior, it meant that the sell-off didn’t send prices below support and reversing trend into becoming Bearish – in-fact we held nicely at the structural accumulation zone and proceeded to double bottom during Trumps Tariff shock cleanly at $2,100, with a sharp rebound within 24 hours straight back to the $2,600 - $2,700 range.

A clearer view of the chart can be found here: https://www.tradingview.com/x/jxkD2fXH/

This is a great indication that despite being dragged down with the rest of the market which is to be expected in times of market-wide volatility, ETH was able to respect it’s broader macro uptrend since 2023, consequently not losing trend and having buyers stepping in quickly to seize the immense “Double Bottom” opportunity. Given all this, I’d say that ETH likely is here to stay defending its #2 place in the pecking order for all Cryptocurrencies for the foreseeable future.

In the December article we also looked at how once ETH broke out of this accumulation phase, we’d likely see the completion of an Inverse Head & Shoulders Pattern, careening price up to a first Fibonacci Extension target of $7,400. While it might seem at first glance with all the recent volatility and market shocks that this may no longer be valid, if we block out all the noise of the sharp candle wick sell-offs that were bought up same-day in recent weeks, we can see the overall structural trend of ETH when changing from a Candlestick graph to a more simplistic Line graph, that nothing has changed.

A clearer view of the chart can be found here: https://www.tradingview.com/x/9FiUA51b/

Actually, if we end the month of February back at around $3,000 or higher, we could easily see the aforementioned “smaller Right Shoulder” easily form here, therefore keeping the original analysis unchanged from December. Sometimes in the market, discerning trend can be difficult when the charts are full of long wicks to the downside where buyers have longed with capital hard and fast to “Buy The Dip”, however that noise can sometimes get in the way of seeing the bigger picture, hence the Line chart in this instance removes that singular day’s extra volatility to the down-side, seeing it got bought up virtually instantly anyway, demonstrating that essentoally nothing has changed in the grand scheme of weekly or monthly timeframe trading. This is exactly what you want to see during a mid-cycle corrective phase, as newer retail participants sometimes trade solely off the noise, hype and mania, where-as veteran traders tend to look at the overall trend structure and bigger picture to make their analysis for the Long term.

Now taking a look over at the current Macro-Economic landscape, ultimately the trend is still the same there too. The US FED are still being extra cautious to make sure they don’t cut rates too quickly and send us straight into a heated-up second wave of consumer inflation. As a result, despite Trump’s vocal conviction that the FED must start cuƫng rates ASAP, for the month of January, the FED decided to keep rates on hold at a forecasted 4.50%.

Source: https://www.investing.com/

Whilst Trump would have preferred they started cuttng right off the bat once coming into office, when asked, he commented that the decision rather to hold rates steady here for the time being was “probably the right move”. The market was happy with this response as it didn’t sell-off again due to any further uncertainty surrounding this, likely in-part to Trump’s tepid and understanding tone.

Coming into 2025 with moderate enthusiasm, a bit of uncertainty yet overall unchanged macro trajectory I think was the best possible outcome for the longevity and remainder of this Bullrun. Remembering the last cycle, we came into 2021 as hot and ever, hittng the ground running with memecoins galore making insane gains, which sounded nice at first, however I very quickly remember by late Feb, early March we started losing steam quickly, which ultimately led to an entire market top in just mid-April, which saw us sharply over-correct to the downside minimum 50% in some cases. The market then struggled for the months following creating uncertainty for far too long, meaning that BTC was never able to regain the $60K peak again with any form of consistency there-afer, eventually bleeding out and spilling all of its gains quickly once 2022 rolled around. This left many feeling like it was an underperforming cycle upon looking back, of which I’m glad we’re not repeating again. Moderate, yet extensively quick market-wide liquidations like we’ve seen in the last few weeks which we forecasted in our December article, the fact that we’re experiencing those now and they’re well within expected correction drawdown tolerances, means that we’re settng up to have a healthy and fruitful 2025 ahead. With a Crypto-pro Trump at the helm of the largest and arguably most impactful economy in the world – I’m confident we’ll see clearer skies ahead in the near future, with fresh narrative and retail euphoria quickly washing away the much needed tepidness of January. Allow us at Stormrake to show you the way through the noise so that you and your portfolio can prosper in a world where the pendulum is swinging back the other way, making not just America great again, but making the whole world have something to look forward to in a new Tech-driven Golden Age where future possibilities of innovation and growth are boundless and exciting once again.

Written by James Ryan

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Reach out to us at Stormrake for further market insight and allow us to help you navigate the sea of mania and laser-eye memes, so that you can realise your goals in the market!

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The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

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The Six Figure Dream becomes Reality – Where to from here?

Tue, 24 Dec 2024 14:51:59 +1100

What an amazing month we’ve had since the US Elections! Not only was our prediction on the money with how a Trump victory would positively affect the markets, but in just a very short amount of time we both sustained the breakout momentum of the Bull Flag pattern we’d been following and careened straight into our first price target at $102,000 USD using our Fibonacci extension strategy outlined last month. While retail mania has started to seep in again naturally with many meme coins pumping and speculation running rampant given the substantial gains across the board, the question many are asking is – where to from here? Let’s take a look into some possible scenarios for Bitcoin and what might be next after the Godfather of Cryptocurrency taps out and hands over the reins to its younger brother later this cycle…

After hitting $102,000, Bitcoin naturally sustained some trading momentum over the subsequent days and weeks allowing us to actually overshoot our target by a small margin and tag a local high as of three days at $108,364. This is to be expected in Bull runs as some overperformance almost always takes place in a volatile market as retail participants somewhat late to the game in this cycle will naturally chase a sea of green for a quick buck. However, as the saying goes; nothing goes up in a straight line forever. Price corrections are a healthy part of any market cycle with Bitcoin being no different. I suspect we’ve reached somewhat of a plateau for now and could be seeing the beginning of a healthy correction. Currently the daily trend is still holding, although a short sharp liquidation of the over-leveraged longs here is starting to take place now as expected. Bitcoin has a history of the very hard and fast price spills in order to weed out some of the bad money in the system, usually finishing of the larger timeframe candles such as the weekly or monthly with a large bottoming-wick, solidifying a base of support before continuing to print higher. Using Fibonacci’s sequence for a retracement here would make sense given it’s a psychologically bearing indicator being used on an emotionally fuelled pump, post-election mania. Right now, we are getting a nice sell-off, which hopefully could allow us to do a retracement into the 0.382% Fib level, getting us to $89,430.

A clearer view of the above chart can be found here: https://www.tradingview.com/x/cICk8mHy/

If this was the case (which is a pretty optimistic one, we might not go that low), it likely means we close out of the month of December with a red month, although as mentioned above if we can get a nice long bottoming wick due to buyers swooping in and buying the dip, we could start moving back upwards rather quickly at these levels which are perceived as a relative “good deal”; this would consequently set us up very bullishly leading into the New Year for 2025 and beyond.

The Alternative scenario (and more likely one) would be that these last few weeks of exhaustive and slowly diminishing gains are leading to an eventual Distribution pattern in the short term. This essentially means that as retail buying momentum starts to slow once we reach a temporary point of market saturation, eventually profit taking comes in and overpowers the few diminishing buyers that are left. Once you start getting more sell orders than buy orders in a market, an inevitable price correction happens, and we start to turn back down such as is currently taking place. Again, all of this is healthy for the markets – so long as we hold and maintain the critical levels of support, of which at this point in the cycle would be rather easy to do, especially given the macro bullishness across all sectors of the market right now. The first level of daily support I also believe to be here at $96,490 as mentioned above in order to maintain the daily uptrend we’re in

A clearer view of the above chart can be found here: https://www.tradingview.com/x/01wuTYO6/

In this liquidation slide-styled correction, even if we wick through the $96,490 level pretty hard, as long as we close daily trend around or above this price, it makes for a fantastic opportunity to add to our holdings so that we can get the last few entries in before the real mania begins. At that point, because we have closed the daily candles and weekly candles holding trend despite the hard sell-off, a strong reversal will likely come in eventually spurring on substantial buying volume followed by even more green on the charts until we fully melt up and blow out ultimately closing out this approximate four-year market cycle. In either scenario, as long as we’re holding the broader structural trend we’ve made up – we’re clear to keep printing higher from here in the coming weeks and months ahead.

In our previous articles we’ve also given credence to how an “Alt Season” may play out, meaning when Bitcoin starts to become the less dominant coin in the market and the alternative Cryptocurrencies that aren’t bitcoin start to gain significant momentum and, in some cases, even outperform BTC by the end of the Bull run. Let’s take a look at what Bitcoin’s younger brother and second largest Cryptocurrency is doing.

Ethereum is well positioned to take advantage of this upcoming “Alt season” and has shown all the technical signs it’s needed to in order to demonstrate it’s not only undervalued currently, but soon to play catch-up with the rest of the market. Historically, Bitcoin is the first major Cryptocurrency to breach new All Time High’s when a Bull run kicks off, becoming the leader that points the way for all other Cryptocurrencies to follow suit once deeper into the Bullish cycle. This is usually true up until the point of a significant “Mid-Cycle Correction” of which I believe we’re potentially in the midst of as writing this. Right now, we’re also getting a sell-off in ETH as its value is closely correlated to BTC at this stage of the cycle, however once we recover out of this, I suspect that the retail mania will ramp up to higher levels of speculation, therefore paving the way for the broader Alt Coin market to melt up even further which will position ETH as an attractive yet currently undervalued-conservative way to gain exposure to this upcoming Alt Season.

The Price Action leading up to this correction has been trending really nicely, in fact ETH has done a similar “Bull Flag” Pattern, of which we successfully predicted on BTC earlier this year. ETH broke out of its Bull Flag post-Trump Election win, pumping from it’s major support which held since early August between the 0.618% and 0.702% Fib levels, equating to lowest point held at $2,131.22 in this zone of psychological support.

A clearer view of the above chart can be found here: https://www.tradingview.com/x/FiWocl2S/

As of early December, we finally reached structural resistance for this bull flag at $4,093.57, meeting the resistance point again from which we fell from initially back in early 2024. Now that we’re correcting from there, we have come back to retest the weekly breakout level that confirmed the uptrend had resumed when we gained the $3,561.89 weekly high. This was a Lower High within the Bull flag itself that we needed to gain in order to reverse trend. Now that this has happened and we have retested this level, it’s an excellent sign that we’re likely to keep trending healthily back upwards by tagging all the needed support along the way now so that we can cleanly break the All-Time High’s and beyond, I suspect most likely by Late January – early February. Until then, this entire trading range on ETH between $4,000 and $3,000 will become an accumulation range likely for the next 30 days or so, providing ample opportunity for market participants to add to their positions before a “sea of green” really takes hold and it’s off to the races!

This deluge of bullish momentum will likely come in when Ethereum completes another more advanced yet bullish pattern which I believe to be currently forming in its final stages known as an “Inverse Head & Shoulders”. Essentially this is another bullish accumulation pattern layered over the Bull flag, indicating further confirmation that we’re likely to head higher after this correction. For the pattern to finalise, we need to form the right shoulder of the pattern, which we are currently doing by having a correction here. Then finally we need to get a breakout of the “Neckline” of the pattern which is around our same resistance at approximately $4,000 in order to cleanly break higher and soar past the All-Time Highs and into virgin territory thereafter.

A clearer view of the above chart can be found here: https://www.tradingview.com/x/dpR7OCrb/

As you can see, also using Fibonacci extensions in order to ascertain where the first target might be once above the All-Time High, it’d likely land us at $7,475.60 where the 1.618% psychological level resides, similarly to how we predicted the $102,000 first target on bitcoin with a high degree accuracy, of which it just reached and pulled back from this month.

As we correct in price here, it’s an excellent opportunity to take a look back at the absolutely stellar year we’ve already had, allowing us to achieve what was once considered impossible; a Six Figure dollar value on merely a single Bitcoin – but it’s not over yet! The most ludicrous part of this market cycle is still to come, although to maximise opportunity, we need to stay vigilant with how this correction plays out over the course of January into early 2025, because if we hold these levels here, despite the bottoming wick volatility and some daily timeframe selling and follow-through to the downside – once we zoom out in larger timeframes it’s clear to see that this is a healthy correction in the grand scheme of things, rather, I’d say it’s a blessing in disguise to veteran market participants. In further articles that are to come over the following months, we will also look at how to chart ETH relative to BTC price, as opposed to USD in order to get an even more in-depth look in how we can capitalise off this incoming Alt Season accurately using historical data and manage risk while we’re melting up in a deluge of retail (and possibly institutional this time around too!) mania. Allow us here at Stormrake to guide you through the noise and catch the hidden gems of the market in order to achieve your bounty this cycle and beyond!

Written by James Ryan

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Get Started

Reach out to us at Stormrake for further market insight and allow us to help you navigate the sea of mania and laser-eye memes, so that you can realise your goals in the market!

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The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

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Spot Ethereum ETF Approved! What's Next?

Fri, 24 May 2024 12:04:24 +1000

The Spot Ethereum ETF has been approved! It's great news for all those already invested in Ethereum and those who are looking to enter the cryptocurrency space. Less than a week ago, the chances of approval were extremely bleak at a mere 25% (According to Bloomberg analysts). These odds rocketed to 75% three days before the ruling, seeing Ethereum rally from $3100 to $3800 (USD), a 20% move purely based on the rumour of the approval.

What now for Ethereum

As anticipated, the price action of ETH was volatile, with moves down to $3500 and back up 11% to $3900 within 30 minutes. Ethereum has now settled back to the price it was pre approval between $3700-3800.

Like Bitcoin's price movement around its ETF approval, the majority of Ethereum’s price increase happened during the hype and anticipation leading up to the approval, resulting in very volatile event. Short term; will it follow BTCs price action post approval and see a correction or will the lack of sell pressure cause the ETF to diverge from BTCs post approval trend and rally from here?

For a longer term outlook, this approval is nothing but bullish for Ethereum and the overall crypto space. The spot Ethereum ETF only means that we will see more inflows into Ethereum itself. As many crypto veterans know, once Ethereum begins to run and outperform Bitcoin, the second phase of the bull market is in full swing. ETH is on the brink of outperforming BTC. Once Ethereum begins to lead the market, then we can turn our attention to phase 3 and 4 for the beginning of altseason.

Could this be one of the last opportunities to enter the market and benefit from the potential upcoming peaks and significant gains? Within the last few months, we have seen Bitcoin and Ethereum receive spot ETFs. Thus, ending the debate of Ethereum potentially being a security. With Ethereum now being seen as a commodity, it helps the case for the rest of the altcoins in being able to classify as commodities too, which is an extremely bullish sign for them.

There is no better time to purchase Bitcoin, Ethereum and other altcoins, this may be the best chance you have to capture the bull market gains.

To Stake or Not to Stake

A benefit of owning Ethereum is the staking aspect of it, where investors can put away their ETH and earn a yield of approximately 4% per annum. However, those who purchase spot ETH through the US approved ETF products, will not be able to participate in staking and earning a yield, nor will the issuers be able to stake the ETH they are holding on behalf of the customer. Meanwhile, Hong Kong is considering allowing their investors to participate in staking spot ETH purchased through their ETF products.

Summary

We now wait for the Spot Ethereum ETF to begin trading and find out what impact it really has. However, it should only be a matter of time before we see major money flow into Ethereum and a full blown Bull-Run to begin...

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No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

Disclaimer

Arbitrum: Airdrop Inbound

Mon, 17 Oct 2022 00:19:19 +1100

Arbitrum is lighting up the crypto trading community with activity as speculation around an airdrop gains momentum. In today's Thunder Trading update, we will jump into the vibrant Arbitrum ecosystem and learn about the hype.

Arbitrum: A Brief History

On Aug. 31, 2021, Offchain Labs, the company behind Arbitrum, announced the official launch of the highly anticipated Arbitrum One mainnet. A number of the top decentralized finance (DeFi) protocols, such as Aave, Balancer, Band Protocol, Curve, Sushiswap and Uniswap are already leveraging or looking to use Arbitrum to increase throughput and lower fees for their users. NFT juggernaut marketplaces such as OpenSea have naturally opened up to Arbitrum, also aiming to provide lower fees to its users.

Since its mainnet launch, the Ethereum scaling solution has been a raging success. Although competing with established ecosystems such as Polygon and up and comers such as Optimism, it's still managed to secure $973M USD of Total Value Locked (TVL) into its ecosystem. It officially has more value locked than Solana and Optimism, some of this though can be attributed to airdrop hype.

Worth noting, that at the peak of the crypto market it had secured as much as $2.66 Billion USD, showing that even at current levels, there is plenty of room for growth.

Understanding Arbitrum

To really drive home how impressive the Arbitrum ecosystem is and how far it has come in a short time, simply peruse the Arbitrum Portal and discover hundreds of decentralised apps (dApps) built on the network.

To understand why Arbitrum and other L2s exist, simply think back to DeFi summer of 2020 where a singular transaction could cost north of $200. The cost of transacting on Ethereum became almost untenable for active users and it went against the ETH ethos of 'banking the unbanked'. The L2s were spun up as a viable scaling solution allowing users to gain all the benefit of the Ethereum security budget, without having to compromise on speed and cost efficiency.

Some of the recent growth in Arbitrum is due to 'airdrop farming'. What airdrop farming boils down to is speculation. When a protocol, dApp or L2 does not yet have a token, traders speculate on if and when this will happen. Timing is one thing but how do users actually "farm"?

In the case of Arbitrum, users farm by bridging their Ethereum over to Arbitrum and participating in the ARBI ecosystem. Participation can be minting NFTs, swapping tokens on DEXs, placing trades on perpetual protocols, providing liquidity to a DeFi pool and countless other on-chain activities. All this activity grows the network, attracts more TVL, increases token speculation and maximises network effects.

Airdrop expectations

For the intrepid crypto investor engaging in on-chain activity known as airdrop farming, the lure of 'free money' and a home run trade deep in a bear market is certainly attractive.
To develop a realistic set of expectations for what can happen with a potential Arbitrum airdrop, we only need to look back at the recent airdrop of its competitor, Optimism (OP).

Looking at the listing it had on Binance OP showed the usual listing pump, as FOMO bids were fired into the newly created order book. Unfortunately, for those who came late, the airdrop farmers also come to harvest their rewards, which promptly created a near 80% sell-off.
This shouldn't be the cause of any dismay for those who are simply wanting to get the token from their broker or exchange, if you're patient you can catch some cheap tokens, as we saw with OP which pumped over 400% from its lows during the bull run. Now that Arbitrum is gaining both market and mind share, OP has been in a slow descending price channel.

For those wishing to build long term positions in L2 tokens, its important to understand that the space is very competitive and just as Arbitrum has usurped the throne from OP, it too can be made redundant with the arrival of a new better L2 solution.

GMX: Arbitrum Kingmaker

For those understandably enamoured by Arbitrum and what the network has built in such a short period of time, it's important to note one of the main risks within the Arbitrum ecosystem is GMX.

Now there is nothing critically wrong with GMX, it's simply a decentralised derivatives exchange allowing traders to access leverage without requiring KYC. The issue is actually the success of GMX, it's the largest protocol in the Arbitrum ecosystem and accounts for 40% of TVL, approx. $394M USD.

Where this can become problematic is when a similar protocol gets built on top of another chain or different L2. If it becomes popular enough this can cause Arbitrum's TVL to reduce over time and have it fade into obscurity. Inversely, if a competitor to GMX pops up on Arbitrum, this could be a boon for the burgeoning L2 and could be the trigger to making it a super sticky ecosystem.

No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.