Ethereum did very little during the trading session on Wednesday, as we are hanging about the $2150 level. At this point in time, the market has shown itself to be resilient near the 200-day EMA, and we have even recaptured the $2000 level. The $2000 level is a large, round, psychologically significant figure that will cause quite a bit of interest and volatility. The fact that we broke above that level is a very good sign, but we also have a significant amount of resistance just above that could come into the picture.
Furthermore, you need to keep an eye on Bitcoin, because Bitcoin is the main driver of crypto markets overall. Nothing goes up or down for any significant amount of time without Bitcoin backing up the move. This is true with Ethereum as well, despite the fact that Ethereum has a multitude of other uses that Bitcoin does not. With that, you have to keep an eye on both charts.
One thing that we can see in this market is that we have been slowing down a bit, and this suggests that we are going to see a little bit of resistance. If we can break above the last couple of candlesticks, then it is very possible that we could go looking towards the 50-day EMA or even the $2500 level. That is an area that has shown a lot of interest, so it makes sense that we would struggle there.
If we break down below the 200-day EMA, which is sitting at the $1730 level, then the market is more likely than not to go looking towards the $1500 level, possibly even as low as $1000. Keep in mind that crypto has been hammered as of late, so a little bit of continuation would not be a huge surprise at all. A breakdown would make sense, but if we see the markets turn around significantly and break above the $2500 level, then it is likely that we could go looking towards the $3000 level. I think at this point it is only a matter of time before we have to make a bigger move, but I still favor fading rallies that show signs of exhaustion.
