Ethereum markets rallied again on Monday after having a relatively stable weekend. At this point, it is worth paying close attention to the $2700 level, because that is an area where we had pulled back from after trying to rally previously. As you can see, I have the Bollinger Band indicator on the chart, and we are most certainly bouncing from an extremely oversold condition. While I am not a huge proponent of using this indicator all the time, the reality is that it shows just how sold off the market had been and how overdone it was.
To the upside, the $3000 level would be an obvious barrier, and it is also worth noting that the 50 day EMA is sitting in that general vicinity. It is dropping from there, but currently it is attached to it. That being said, there is nothing to stop this market from recovering based solely upon that indicator by itself. Obviously, Ethereum is going to be behaving much like Bitcoin, and if Bitcoin can rally it will drag Ethereum right along with it. It should be noted that over the last couple of sessions it has outperformed Bitcoin on the whole, but the two do not diverge for very long. Pay close attention to Bitcoin, as it gives you a bit of a “heads up” as to where Ethereum will go. That can be said with any coin obviously, but Ethereum and Bitcoin do tend to track each other quite nicely.
If Ethereum can break above the $3000 level, it is very likely that it will continue to take off for a bigger move. At that point, we might even enter another bullish market. I do think that given enough time, Ethereum is going to find plenty of buying pressure, and I do think that value hunters will come back into the picture. If that is going to be the case, then I am more than willing to add to my existing long position. I do not have any interest in trying to short this market anytime soon, even though I recognize very clearly that we could have further to go. I am a longer-term buyer of Ethereum and also just a longer-term holder. I believe that we are in the midst of trying to form some type of bottoming pattern, so pay close attention as the quieter this market gets, the better that actually is.
