- Ethereum has dropped during trading on Thursday as the risk appetite of traders continues to deteriorate.
- It looks as if the $1500 level will continue to be a little bit of a magnet for the price, but at the end of the day we have sliced through it before, and based upon the size of this candlestick, it looks like we probably will again.
- After all, this is a classic “sell the news” type of situation, and therefore it should be treated as such.
The 50-Day EMA sits at the top of the candlestick, therefore it’s likely that we will continue to see it offers a bit of technical resistance. It’s also worth noting that the indicator is flat, and therefore we might continue to chop around. At this point, it’s very likely that the Ethereum market is going to fall right along with the rest of the risk appetite assets, as there are a lot of concerns when it comes to the global economy, and of course, a lot of institutional money is currently in the Ethereum market, so if they decide to leave, it causes a bit of a vacuum.
Downward Pressure Ahead
If we break down below the $1500 level sustainably, then it’s likely that we go down to the $1200 level. The $1200 level has previously been resistant, so it should be supported. It’s part of a huge block that drops down to the $900 level, which is like a trapdoor. If it gets pierced, Ethereum is going to plunge rather rapidly. At that point, I suspect that the market is probably going to continue to see a lot of downward pressure as the global slowdown has a lot of institutional investors running toward safety assets such as the US dollar and the bond market. In other words, the value of the US dollar should continue to climb, and as Ethereum is price and those very same US dollars, we will fall over the longer term. Rallies at this point in time should end up being a nice selling opportunity, and I do not think that we are going to break out anytime soon. The idea of the merge happening has already been priced in, and of course, we have seen the merge, and go now. In fact, it’s a bit ironic to consider that Ethereum dropped 9% on the same day it happened. If nothing else, that tells you how this market is playing out.
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