- Ethereum has rallied over 3.7% early during the trading session on Monday, showing signs of strength again. As we approach the $1350 level, one must ask whether we are getting ready to break out again.
- We are most certainly at a major point of inflection that will attract the attention of a lot of people.
- If we can break above this area, then the next target would be the 200-Day EMA, presently sitting just above the $1500 level.
While everybody has been focusing on the scandals around crypto, it’s worth noting that it has not completely fallen apart in that scenario. Quite frankly, I think a lot of the negativity is priced into crypto now, especially as most of the selling was already done long before the FTX scandal. In other words, one must wonder whether we have seen the worst at this point. It certainly looks as if in the short-term crypto traders are willing to look past the line, but whether the institutions come back will be a completely different scenario to ponder. We have a long way to go to build trust in the crypto world, but there are 2 places they will look first: Bitcoin and of course Ethereum.
It’s not advisable to Jump in With a Huge Position
If we do pull back, one would think that the 50-Day EMA could come into the picture to offer a bit of support, which is currently sitting at right around $1250. That scenario would be very negative if we broke down below there, and it would just simply put this market back into a bit of a consolidation rectangle. Keep in mind that there are a lot of things out there to cause issues now, so even if you do start thinking about buying Ethereum, it’s not advisable to jump in with a huge position.
You must keep in mind that the Ethereum market is moved by a lot of the same hopes and fears that the Bitcoin market is used to seeing. In other words, you need a bit of help from Bitcoin at the same time, but it certainly looks as if Ethereum is at least capable of sneaking in under the radar, so this is a chart that I thought I should bring to your attention so that you can pay attention for a potential breakout.
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