The Ethereum market went back and forth on Wednesday as we are sitting just below the $2000 level. The $2000 level is a large, round, psychologically significant figure, and it makes sense that we have seen a lot of choppy behavior. That being said, it’s worth noting that we have pulled back a little bit overall, as we continue to see sellers get aggressive.
Furthermore, keep in mind that Ethereum is presently going through the process of trying to expand the network. While the expansion continues to be very sluggish, there is a real lack of demand for Ethereum. Furthermore, the markets have been in a downtrend for a while and based on the selling pressure, we have been forming a descending triangle, something that people will look at as a potential signal as well. If we do break down from here, it’s likely that breaching the $1900 level will open up a move back down to the $1700 level, an area that has been the recent bottom for the market. Quite frankly, Ethereum is going to struggle right along with the rest of the crypto market as it seems like there is no real catalyst to go higher.
Even if we were to rally from here, the $2200 level should offer resistance, and if we break above there it’s likely that the 50-day EMA at the $2500 level could be a target as well. I have no interest in buying Ethereum anytime soon, because there is more than enough time to get involved in this market if it does choose to rally. I believe at this point all crypto markets are toxic, although there are a couple of smaller ones that are good for trading. I would look to fade any rally in Ethereum in the short term, and don’t even have a scenario in which I would get aggressive in this market to the upside unless the Federal Reserve changes its overall attitude. The central bank does not look likely to do so, so risk appetite is going to be miserable to say the least. This is one of the biggest problems that Ethereum and the rest of crypto will continue to face. Ultimately, even if you are bullish, you have plenty of time to get involved.
