The Ethereum market bounced a bit on Monday as the $2000 level continues to be somewhat important. There is a lot of psychology attached to this area, so it is not a huge surprise to see the market rally. Furthermore, we have seen the market bounce around between $2000 and $2100, and I believe that will continue to be the case over the longer term. The market will continue to be noisy, and of course, pay close attention to the $2000 level.
There is a massive candlestick from two weeks ago that reached all the way down to the $1730 region, and if we were to break down below there, then it is likely that the market will dump quite drastically. At that point, Ethereum could enter into a bit of a freefall, as the crypto markets in general are struggling. The crypto markets are going to continue to suffer at the hands of risk appetite being eviscerated. As long as there are concerns around the global economy and central banks around the world tightening, it is difficult to imagine that a lot of money is going to flow into heavy risk assets at the same time, as has been demonstrated by stock markets, tech companies, and other cryptos.
If we do rally from here, is likely that the $2500 level will be significant resistance, and I think it is going to be difficult to break above there. Any signs of exhaustion in the form of a long way to the upside is going to be my signal because I do believe that Ethereum has further to go to the downside. The market breaking above the $2500 level is a good sign, but there is also the 50-day EMA which sits right there as well. With that being the case, the market is likely to see a lot of volatility and concern.
At this point, I do not have any interest in buying Ethereum or any other crypto, due to the fact that the markets have sold off so viciously that I think that even if we were to turn things around, you have all the time in the world to start building a position. Furthermore, you can make an argument for a little bit of a descending triangle over the last couple of sessions, so there is that to worry about as well.
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