ETH/USD has done very little during the trading session on Monday, as we continue to see the market look as if it is threatened. Recently, we had seen a lot of upward momentum due to the network merge and the upgrade coming, as it has had a lot of enthusiasm enter the Ethereum market. At this point, the market is sitting just below the 50 Day EMA, which is a technical indicator that a lot of people pay attention to. If we break above the 50 Day EMA, we still have a lot of selling pressure above there to keep in mind.
Keep in mind that the US dollar has been strengthening for a while, and that does open up the possibility of a bigger move. The US dollar strengthening also works against the value of Ethereum and other risk assets, so it all ties in together quite nicely. Because of this, I think it is probably only a matter of time before this market breaks down. It’s also worth noting that the 200 Day EMA’s is just above the $2000 level, which is where we had pulled back from previously.
Market can unwind
On the downside, the market could very well drop to the $1200 level, which is the recent resistance barrier that we just broke above. A bit of “market memory” could come into play, and therefore you need to be cautious about that region. If we do slash through that level, then it’s likely that the market could unwind quite drastically.
On the upside, we need to see a daily close above the $2000 level in order to think that we can break out for a bigger move. This is not to say that we necessarily need to melt down, just that the market is obviously finding the area around $2000 very difficult to overcome.
- With the strengthening US dollar and a severe lack of risk appetite, it does make a lot of sense that Ethereum has taken a bit of a beating.
- I suspect that we have further to go to the downside given enough time.
- Be advised that we need to be very cautious and could be looking at an opportunity to buy Ethereum at much lower levels.
- If you believe in it longer-term, think of this as value that’s about the show itself.
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