Comparing ETH to AMZN After The Bubble

17 apr 2019

Amazon chart from after the dotcom boom for comparison:

I've posted a few bearish ideas recently, simply because things have started to look a bit worrying in the altcoin market, and I want to be prepared in case something does go the opposite direction, but I have been generally long term bullish on the whole market since most coins have broken out of their bear market downtrends. I bought ETH initially at $107 and have increased my stash a bit by trading ENG and BAT. Sorry if I'm posting conflicting charts, but that's because things are a bit confusing at the moment. If we analyze at it objectively though, the market clearly looks like it has just had a major bullish breakout. Until things start to look very different, there's no real reason to panic.

As you can see, Ethereum broke out of its downtrend channel recently, and has started to move up slowly. It has held above the major resistance $160, despite sliding on its Bitcoin ratio. A number of alts look similarly bullish, when paired with the U.S. Dollar. Unless alts start looking bearish against the dollar, I'm going to ignore their Bitcoin pairings for the time being.

This is a hypothetical chart, and it's important to note that this is entirely speculation. However, should Ethereum follow a similar trajectory to AMZN after the dotcom bubble popped, we could follow something like the yellow path. As you can see by comparing it to the Amazon chart above, Ethereum is following similar price action so far, following the break of its downtrend channel. The green X's mark corresponding potential targets on the ETH chart.

This doesn't mean they have to continue being similar, but I think it would be very interesting if this plays out. It's important to note that Amazon stock and cryptocurrencies are very different things...but they're both prone to the same psychology that dictates market behavior. If this does play out, by extension it will also mean a few things for the short-mid term:

1) Bitcoin will probably not correct as much as some people (including myself) are expecting it to
2) ETH will likely start to increase again on the Bitcoin ratio
3) Other promising altcoins will probably begin to follow a similar pattern.
4) Litecoin may not have as severe a drop as it did before its last halvening run, meaning perhaps it won't get back down to $40-50 as I've been speculating.
5) The bear market is already over, and the bottoming period will be shorter than 2015. Fundamental reasons for this would be that the world is a little bit more prepared to accept cryptos as of its society.

For the long term, it means that IF Ethereum is going to continue its exponential growth and follow a similar path to Amazon, it could be worth as much as $30,000 per coin within 20 years. Amazon increased by a factor of roughly 20 from its bubble peak, and a factor of 20 from Ethereum's high near $1500 would put it up there.

This is not financial advice. Just a potential bullish scenario. Of course, if ETH breaks down and starts to gain some downside momentum, that would negate this idea.

-Victor Cobra

17 apr 2019

Nota

Actually, since the Ethereum crash happened twice as fast as Amazon's, the $30,000 price target could in theory happen within 10 years instead. Again, this is totally speculative.