The Ethereum market fell on Wednesday, but then turned around to show signs of life again as we approach the $4000 level at the time of writing. This is an area that previously had been support, so now it should be resistance, at least in theory. Ultimately, the market is likely to continue to see this as an area of interest, and I think we will probably see a little bit of “market memory” come into the picture. The $4000 level has a lot of psychological importance attached to it as well, so all of that being said I think you need to look at it through that prism.
To the downside, the $3700 level has offered quite a bit of support, and I think that will continue to be the case. Breaking down below that level would be rather bearish, but now that the Federal Reserve has come and gone, it is likely that the less-hawkish-than-anticipated attitude will have people chasing risk appetite, meaning crypto in general. In fact, we are seeing crypto rise across the board, so Ethereum will do the same thing. The 50 day EMA sitting above continues to offer a bit of psychological resistance, but at the end of the day we are still very much in an uptrend.
Pay attention to the US dollar, because if it does drift a little bit lower, that could get Ethereum a little bit of a tailwind as well, although it is not quite as influenced by currency than some of its other competitors like Bitcoin. After all, Ethereum does have a lot of use case scenarios, so as long as we continue to see more blockchain development, we will almost certainly see more momentum in this market. I am a longer-term investor, but right now it certainly looks as if we are trying to recapture the momentum. A move above the 50 day EMA will almost certainly bring in fresh money. At that point, I would not be surprised at all to see this market go running towards the $4500 level, which is a round figure that makes for a nice target. Breaking above that level then will allow this market to finally go chasing after the elusive $5000 target, which I still think is very possible.
