- Ethereum has initially fallen during the trading session on Wednesday but turned around as the $1500 level has offered a little bit of support.
- Ultimately, the market looks as if it is trying to fight the 50-Day EMA, which sits just above.
- That of course is an indicator that a lot of people pay close attention to, so it should not be a surprise at all to see this market treat that as an area of interest.
- After all, the markets do tend to like large, round, psychologically significant figures, and that of course is rather psychologically significant.
If we break down below the bottom of the candlestick for the trading session on Wednesday, then it’s likely that we will try to head back down to the previous consolidation area, opening the possibility of Ethereum dropping down to the $1200 level. The $1200 level is the top of the overall consolidation area that extends down to the $1000 region. The $1000 region of course is a large, round, psychologically significant figure as well, and will clearly attract a lot of attention.
Waiting for the Merge
Any move below the bottom of that purple box that I have on the chart opens the possibility of Ethereum dropping all the way down to the $400 level. The $400 level is where this market took off from previously and should offer quite a bit of “market memory” for traders to pay close attention to. Furthermore, the candlestick shape itself is a hammer, and that does suggest that perhaps there are plenty of value hunters in the area. It’s also worth noting that the US dollar has pulled back a bit after an initial surge higher during the day, so that may give markets the ability to extend out into riskier assets such as Ethereum.
The 200-Day EMA sits at roughly $2000, and I think at that point the trend would change if we were able to break above there. I don’t see that happening anytime soon, and I think that any short-term bounce at this juncture is more likely than not going to see a lot of selling pressure. Overall, the market has already priced in “The Merge” into this market, so I don’t think that has much more influence either, unless of course entire situation becomes glitched, which could send this market much lower.
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