On the downside, the $2500 level continues to be supported, extending down to the $2400 level. If we were to break through all of that it could open up fresh selling in the Ethereum market, which I still believe is a very likely possibility. If that happens, we could break down towards the $2000 level, which is a large, round, psychologically significant figure. The $2000 level will attract a lot of attention, just as a breakout to the upside and a test of the $3000 level could be.
This is a market that recently had seen the “death cross”, and therefore longer-term traders may look at this as a market that is ready to go much lower. The crypto market has been struggling due to the fact that monetary policy is tightening, and the risk appetite out there will continue to slide as a result. As long as that is the case, crypto will continue to cause some issues, and therefore I have a hard time believing that you should be dumping all of your money in right now. If we do see a turnaround, you should have plenty of time to get involved.
The only thing I think you can count on is a lot of volatility, and you need to pay attention to Bitcoin which has been a bit sluggish, so that is probably going to continue to be the case over here as well. Because of this, I think we need to see the market grind back and forth in general and perhaps build up a bit more stability before going “all in.” Furthermore, we need to see more risk appetite out there for a sustained move in order for crypto to follow along with other assets. The Federal Reserve certainly looks as if we are going to see them hiking rates almost every meeting between now and the end of the year, so tightening monetary policy will continue to work against this market.
