The Ethereum market broke down significantly during the course of the trading session on Thursday to slice below the $2500 level before bouncing again. At this point, it looks as if we are trying to form a little bit of a “double bottom”, and that could be a good sign for the future. That being said, we have to worry about whether or not crypto in general will rally. Quite frankly, Ethereum is getting ready to form a “death cross”, when the 50 day EMA breaks down below the 200 day EMA, a sign of longer-term weakness and something that investors will use from time to time.
When I look at this chart, I recognize that we are at least trying to stabilize a bit, and that of course is the first sign of strength. However, I think at best you are probably looking at a scenario where we might have a consolidation range for a bigger move. Typically, when you see this type of move it is likely that it continues to the downside because there just is no demand out there. Furthermore, one would have to think that it is probably only a matter of time before another shot comes across the market and has people running for cover.
Do not get me wrong, I like Ethereum longer term, but I do believe that we will get an opportunity to pick up the market at lower levels. Ultimately, the market forming a bit of a hammer is a good sign and therefore if we can break above the top of the candlestick we could go looking towards the top of the previous candlestick. If we break above that then the market is likely to go looking towards the $3000 level. If we break down below the $2300 level, then it is very likely that we go looking towards the $2000 level underneath which is a major psychological level and an area where I would anticipate that we could probably see a lot of support. Breaking down below there would then open up a significant move lower in my estimation. At that point, we might even be talking about so-called “crypto winter”, when crypto falls apart and we just grind sideways for ages while nothing happens. Ultimately, this is a market that I think you probably have plenty of time to get involved in.
