The ETH/USD market drifted a little bit lower during the trading session on Wednesday, as we said just above the 200-Day EMA, after pulling back from the crucial $1700 level. Ethereum has been in a rain for a while, and we are close to the top of it.
What I find interesting is that the Shanghai upgrade is coming, and Ethereum has done very little. I think this suggests that perhaps we don’t really know what to do with crypto yet, and while we keep being told that “we are early”, there’s no real everyday use case for crypto now. I’m not saying there will be, but clearly, we are light-years away from that. It seems like a lot of what pushes crypto is the “possibility” that the next hot thing is here.
Keep Your Position Size Reasonable
If we break down below the 200-Day EMA, I think it opens the door to reach out to the $1400 level, where the 50-Day EMA currently sets. That should offer a bit of technical support, but we will have to wait and see whether it does. On the other side of the equation, if we break above the highest in the last couple of days, the $1700 level being broken on a daily close would be very bullish. I think it would take some type of real catalyst to make that happen, and the network upgrades don’t seem to be what’s going to cause that.
You could make an argument for the 50-Day EMA crossing above the 200-Day EMA is bullish, but quite frankly I just don’t trust that indicator because it tends to be either very late or very wrong. Keep in mind that the moving averages are relatively flat, so might be a bit much to ask of the market to suddenly get bullish like that. Nonetheless, I will follow a breakout of the $1700 level on a daily close. In that environment, I would anticipate that the next target would be the $2000 level, which has been important a couple of times in the past. It does look like crypto is trying to take off to the upside, but whether we have any follow-through is still going to be the major question. Until then, keep your position size reasonable.
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