- In my daily analysis of the crypto markets, the Ethereum market has captured my attention, as we had hit a large, round, psychologically significant figure in the form of $4000, and have fallen pretty significantly from that level.
- That being said, I don’t necessarily think this is a hugely bearish signal, I think it just shows that we got to the $4000 level far too quickly.
- If we can turn around and take out the highs of last week, that probably kicks off the next “FOMO trading”, but there’s also a huge argument to be made for “buying on the dip” going forward.
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Technical Analysis
The technical analysis for the Ethereum market obviously is very strong and has been for some time. The 50 Day EMA crossed above the 200 Day EMA toward the end of November, and we really haven’t looked back since. All things being equal, this is a market that will follow whatever happens in the Bitcoin market, as the overall risk appetite for crypto seems to be dictated from the top down. Regardless, you should also keep an eye on the so-called “altcoins” out there, because so many of them use the Ethereum ecosystem that they can be thought of as a bit of a harbinger for when we had gotten a little too far ahead of ourselves.
When I look at the chart, the first place that stands out to me is the $3600 level, an area that previously had been important, but I also recognize that the market could break down below there and go looking to the $3400 level. It is somewhere in that pocket of support that I would become very interested in a bounce. Alternatively, if we turn around a break above the highs last week, then I would be a buyer there as well. Ethereum is going to be very volatile, and I suspect that you will probably see Bitcoin break above the $140,000 level to kick off the move-in Ethereum, so will keep an eye on both charges.
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