The Ethereum market fell a bit on Tuesday but turned around to show signs of life again. That being said, the market has not broken above the top of the hammer from the previous session, but this is a market that I think will eventually go looking towards the $3000 level above. I think this is a market that will continue to see a lot of value hunting, as we have sold off so drastically. That being said, whether or not we can take out the $3000 level is a completely different story.
If we were to break down below the bottom of the hammer from the previous session, then Ethereum would probably fall apart. In that scenario, we would more than likely go looking towards the 2000 level rather quickly. I think at this point it is very unlikely though, and I believe that we have a scenario in which people will continue to see this as a “buy on the dips” market from a longer-term perspective, but a lot of technical damage has been done in the short term. Because of this, a lot of people are probably a bit skittish about buying, but as soon as we can get some type of big move higher, or perhaps better yet, a sideways move that lasts several days, I think a lot of people would jump back in. After all, Ethereum is supposed to have a big year this year, as a lot of the improvements in the ecosystem will be rolling out.
That being said, I think that unless you are willing to hang onto a lot of volatility, you probably have no business trading this market. This is going to be thought of as more of an investment, which is how I trade Ethereum. I have been buying over the last day or two, in little bits and pieces. This is to add to an already existing long position that I have had for a while. I have no interest in shorting this market, as it is simply too strong long term to do so. With this, I think the market has seen most of its damage, and it will be interesting to see whether or not we get a little bit of help from the FOMC.
