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Over the longer run, I do think that Ethereum will take off, but I think we have a long way to go before we are “all clear.”
- The Ethereum market rallied a bit again during the trading session, but as you can see, we continue to hear a lot of noise just above current pricing.
- There is a major resistance barrier between the $1800 level and the $2000 level.
- If we can break through all that, then it would be a very bullish sign, but I just don’t see how that happens without some type of massive momentum-building exercise going on.
Pay Attention to Risk Appetite
Signs of exhaustion coming into the picture could get things going to the downside, in a bid to pull back to the 50-day EMA. The 50 Day EMA is currently near the $1380 level, so it’s likely that could be a target for a serious breakdown. Pay close attention to the risk appetite of traders around the world, as it could give you an idea as to how Ethereum plays out. After all, crypto is pretty far out on the risk spectrum, so traders need to feel fairly comfortable putting money to work in these riskier assets.
If we were to break above the $2000 level, it could be a severe change of trend, perhaps opening up this move to a much bigger run. This could be due to the merge coming, as well as quite a bit in the way of upgrades throughout the year. There seems to be good news on that front, but we have not been able to break out seriously at this point, so you have to keep that in mind as well. I think more likely than not, we are in the process of trying to build up a bit of an accumulation phase. That being said, the market is very noisy, so you have to be cautious about that as well.
On the downside, if we break down below the $1200 level, that could send Ethereum much lower. At that point, it’s likely that we could go down to the $900 level. The $900 level getting broken through could open up a move down to the $400 level for Ethereum. Ultimately, I think this noisiness will continue, so you should be cautious about putting too much into the market at one time, especially as the market has to worry about so many external influences as well. Over the longer run, I do think that Ethereum will take off, but I think we have a long way to go before we are “all clear.”
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