Ethereum did very little Wednesday, but it is impressive that we could hang about this area for as long as we have. After all, we have seen a lot of momentum jump into this market and push it out of the previous consolidation range. The measured move of that range suggested that we were going to go somewhere in the neighborhood of $1500, which we have already reached. At this point, we can continue to go higher it could send this market looking to reach the $1800 level above, which I think is a major area of supply.
Now that we are above the 50-Day EMA, some technical traders will start to look at this as a potential buying opportunity. While I don’t necessarily argue against that, the reality is that Ethereum would have a long way to go before proving itself worthy enough for a longer-term buy. In fact, I believe the $1800 level is the beginning of significant resistance all the way to the $2000 level, so I would look for some type of shorting opportunity in that general vicinity, or if you have bought Ethereum somewhere recently, then you may be looking to take profits in that area. Either way, I do not anticipate that Ethereum is suddenly going to shoot through a ton of resistance that is clearly above where we are now.
If we did break above the $2000 level, then obviously I would have to rethink the entire situation. However, it looks to me like it’s going to take a Herculean effort to make that happen, not the least of which would be the fact that there is so much risk aversion out there. The last couple of days have been really good to the stock market, so we may just be seeing a general ability to put the money to work. Whether or not that sticks is a completely different question, so I would pay close attention to the next couple of days, recognizing that if we do break down from here, it’s likely that we could test the 50-day EMA, which sits just above the previous consolidation area. Either way, I would anticipate Ethereum to be very noisy, but if you have been trading crypto for any length of time, you also recognize that crypto tends to be very noisy under the best of conditions.
