and the distribution of digital products.
ETH and SOL are playing catch up with BTC
This is a segment from the Empire newsletter. To read full editions, subscribe.
How can you tell when a bull run is over?
After all, bitcoin is seemingly on the verge of breaking its price record from March. If it keeps going, then at some point it’ll reach another obvious local peak, and we’ll soon start to wonder whether that was it.
All we can do is look backward, and even then, it’s more entertainment than meaningful prediction. The crypto market is just astrology for dudes and so on.
Who cares, let’s lean into it.
We know that ETH has lagged behind bitcoin so far this year. Great fodder for think-y threads on X about the demise of Ethereum in favor of Solana, but ETH has always lagged behind BTC when it comes to setting new price records.
The lines (ETH in purple, BTC in orange) start at bitcoin’s all-time high in Dec. 2017 and finish when they return to beat those records.
ETH capped off the 2017-2018 bull run with an all-time high on Jan. 13, 2018 — 27 days after bitcoin had peaked at almost $20,000.
It took BTC 1,080 days to blow past those levels in early December 2020 while ETH was still 60% below its own price record.
ETH would go on to more than double over the next 56 days, hitting an all-time high toward the end of January 2021.
This time is different. It’s been 238 days since bitcoin broke its previous high from November 2021, and ETH hasn’t been within 20% of beating its peak. Currently, it’s 45% below.
Although, SOL is doing just about as well as ETH over the same period.
SOL is the faded blue line — it’s a slightly more volatile ETH
ETH and SOL have even been tightly correlated since bitcoin’s peak in March, with SOL still 31% below its November 2021 record high.
Whether ETH and SOL will catch upon confirmation of a bitcoin bull run is a question for your paid group leader.
I will give you this instead: BTC, ETH, SOL (and dozens of other tokens) may be out of sync right now. And that’s bullish, going by the palmistry of the prior four-year cycle.
How you tell the end of a bull run is when the major assets converge at all-time highs.
Cycle peaks shown by the green dots
BTC and ETH were not in lockstep during their drawdown recoveries between cycle tops. Returning to those highs was a staggered process.
But they were almost exactly aligned when they reached new peaks nearly a year later: BTC and ETH hit all-time highs on the same day, while SOL topped out a few days earlier.
Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.
Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.
Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.
The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.