Ethereum: Hurst Cycles - 4th May 2022

A look at the 40 week nominal low placement, the lacklustre move from the 40 day nominal low and some further insight from the frequency domain

Tools required: Nominal Model | FLD | FLD Trading Strategy | FLD Trading Strategy (Advanced) | Principle of Nominality | Underlying Trend

Phasing Analysis

Long Term

Components greater than and including the 18 month nominal cycle

Medium Term

Components less than and including the 18 month nominal cycle

Short Term

Components around the 80 day nominal cycle

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Analysis Summary

Ethereum largely disappointed out of the 40 day nominal low phased on the 15th of April, only reaching to around 3200 before breaching stops later in the cycle. In a similar vein to Bitcoin, this is an early sign of the initial weakness at the 40 week component, larger cycles exerting downside influence and resulting in a net sideways consolidation (or pause zone) so far. Note that a pause zone occurs prior to another trending move in the same direction of that which preceded the pause. This will likely be the move later in the year to the 18 month nominal low, due late October to mid November, according to the current phasing analysis.

The 40 week nominal low has been confirmed by a cross of the downward 20 week VTL and is assumed to either have occurred mid March as phased or early February, a discrepancy of one 80 day component. This will be resolved in due course as the smaller components are once again visually apparent.

Below, a narrowband filter is applied to Ethereum (close prices) and the 40 day component broadly isolated (period of around 30.25 days, in line with Sentient Trader’s pattern matching algorithm approach). Amplitude is attenuated somewhat in the move to the 40 week nominal low, although to a lesser extent than in Bitcoin. Recently the 40 day component has been more clear in Bitcoin and attenuated heavily in Ethereum - another good reason to employ the principle of commonality in a phasing analysis!

A narrowband filter is applied to Ethereum. Specifically a bank of filters with narrowing widths in the frequency domain are iteratively applied to the time series. This is shown by the gradient light blue outputs above. An average of those outputs gives a good approximation of the 40 day component with evident amplitude and phase modulation, in thicker blue.

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