- Ethereum was very quiet on Wednesday as with very little in the way of momentum. \
- The market has been consolidating for a while
- We are going to simply trade back and forth between the $1250 level above, and the $900 level underneath.
- As the market continues to go back and forth, it looks as if we are either trying to build a bit of a base, or we are getting ready for the next leg lower.
The Next Leg Lower
At this point, I suspect that the next leg lower is probably going to be the most likely outcome. Because of this, the market is more apt to simply grind away until we get some type of fundamental reason to get moving. If we were to break down below the $900 level, then it opens up the possibility of a move down to the $500 level. The market could get down there rather quickly on some type of bad news, not the least of which would be a strengthening US dollar which seems to be all but a formality at this point.
If we were to break above the $1250 level, then it’s possible that we could go to the 50-day EMA which currently sits at the $1500 level. After that, the $1750 level is the next target, which we have broken down from. I highly doubt that we can get above there, and I think that as long as we have a strengthening US dollar and a tightening Federal Reserve, it’s difficult to imagine that some of these more risk appetite-sensitive assets will do well. In fact, Ethereum is going to get smoked as long as money is not willing to take a significant amount of risk as this is about as risky as it gets for most institutions.
Fading rallies continue to work from what I can see, especially as Ethereum 2.0 drags on, as we have no real catalyst for the market to go higher. However, the Federal Reserve will eventually change its tune, and when it starts to talk about loosening monetary policy, it’s at that point that crypto, and by extension Ethereum, could get a bit of a push to the upside. Ultimately, this market goes lower.
