All across finance, the conversation of the day has been centered around China and the ongoing regulatory crackdown As it pertains to the crypto market and assets like Bitcoin and Ethereum, holders are wondering if there could be spillover effect and additional FUD that could on the ongoing recovery in play.
But it is in the Tencent chart itself that suffered a devastating collapse today that should have Ethereum bulls worried due to a frightening comparison between the two. Making matters worse, knocking on wood won’t help, as the Lumber futures chart could help shed a light on what the next target might be for the top ranked altcoin.
How The China Regulatory Crackdown Is Hurting Crypto, Chinese Stocks
Ever since Black Thursday last year markets have been in an explosive uptrend. Bitcoin rallied more than three times its former all-time high, Ethereum nearly four times as much, and even the stock market is more than double the value it was more than one year ago.
Cryptocurrencies corrected harshly a few months ago, but the stock market kept on climbing. The US stock market still is, although as of today the rally to new record highs has taken a pause – a pause due to fear related to a completely different region.
Related Reading | TA: Ethereum Trims Gains, Why ETH Could Restart Its Rally
In addition to the country banning Bitcoin mining and causing other dramatic that hurt crypto prices, China has been rolling out a widespread regulatory crackdown that has crippled certain stocks in the country. For example, Tencent dropped more than 10% in the last 48 hours alone. Such a drop is nearly unheard of in the stock market, while that type of move is typically a walk in the park by crypto standards.
An equally sized move in an altcoin like Ethereum, could be much worse by comparison.
Let's hope Ethereum doesn't fall victim to a similar fate | Source: ETHUSD on TradingView.com
Ethereum Chart Comparison Has Bulls Knocking On Wood
A comparison with Tencent is exactly why crypto bulls need to be worried and fearful. The top altcoin that the rest of the industry is built on, is showing a structure very similar to Tencent before the massive breakdown.
What’s worse, is the fact that almost all price action over the last three years between the two assets looks highly similar. Placing the two assets next to another once-trending asset that has since collapsed, further paints a frightening picture.
Related Reading | Why The Next Crypto Bear Market Will Be The Worst Yet
Random-length lumber futures have a chart that shows a drop so nasty, that if the same thing happened in Ethereum, it would take price per coin back to around $3725. The three charts appear to have bottomed at around the same level and date, topped around the same level and date, so why wouldn’t they continue to behave in a similar fashion?
— Tony “The Bull” Spilotro (@tonyspilotroBTC) July 27, 2021
What do you think, is Ethereum in trouble?
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Featured image from iStockPhoto, Charts from TradingView.com