Some price action facts of ETH
Is supply drive demand?
Not necessarily, Supply is only one factor of the demand, other major factor is adoption. Price action is always an auction method. And the driver of the auctions are buyers and sellers. If the buyer is less and the sellers are more prices will fall, nothing to do with the availability of the commodity on that time. *Scarcer commodities with higher adoption will drive the demand which will create higher price auctions.*
Market: Crypto markets are still in the niche area of adoption. In the case of Crypto, why cryptocurrency price drive high in 2020 -2021 is not the adoption of the technology, but availability of the cash in the market. FED
pumped 16 trillion to the market, and many of them came into the market, driving the price up otherwise known as inflation. Prices in stock/cryptocurrency all are inflated price. Not the adopted demand price. So right now, FED reduced the cash flow, and price will eventually come back to 2019 range !! in the above chart is the ETH price action which created big *Head and shoulder* pattern in the high price area and broke the neckline. This is a strong bearish price action, which indicates price will settle into 250-300 range eventually in 2 years. Not only that ETH price is highly correlated with the general market now (90%), so if the general market comes down, ETH will also come down. Otherwise, the recent change in the technology, if that drive the adoption of the chain and created more products in the same chain could drive the demand, which will drive the price, (This is hypothetical argument; I call this as *HOPE*) and it is not a strategy for making money in the market.
We are talking about 2 general community; The technology *investor* and price action *trader*; If you are technology investor, how you monetize in cryptocurrency? Only way to monetize in crypto is the price action, unlike in stock investment. In stocks you are part of the company, and you can be the driver of the company if you have enough stock, in cryptocurrency it is not possible (as far as I know). The only way to make money in currency and cryptocurrency market is by monitoring the price action. So liking tech is one thing and making money from that is totally different ball game.