Ethereum fell a bit on Wednesday as we continue to see the decimation of the crypto markets. The $2000 level offered a little bit of resistance, and we have now pulled significantly below there to think that we are going to test the lows again. At this point, the market is very likely to break below the $1700 level over the next several sessions, and when it does, I suspect that there is going to be a lot of selling pressure.
Rallies at this point will be sold into, and I do think that the $2000 level will continue to offer a little bit of resistance. Above there, the next resistance barrier is at the $2200 level. Furthermore, we also have the 50-day EMA that sits just above the $2300 level and is dropping from there. In other words, there are a lot of landmines on the way back up, and there is nothing out there that suggests crypto should be rallying at this point. After all, the monetary policy from several central banks around the world is getting tighter, which takes risk appetite out of the markets. Remember, crypto is about as far out on the risk spectrum as you can get, so it’s going to be a while before significant money comes back into the markets.
Looking at the start, I think that you will continue to see traders come in and fade rallies when they occur, and once we break down below the $1700 level, the market will see an acceleration to the downside, and it would not surprise me at all to see Ethereum enter another “crypto winter” type of action as we have seen a couple of times in the past.
I like the Ethereum blockchain, and therefore I like Ether, but that does not mean that I have to like it right here, right now. I think we will have plenty of opportunities to buy ETH at much lower levels, and that’s exactly what I plan on doing. I feel no need to get overly bullish at this point nor do I think that there is any rush to accumulate a huge position. I think you have plenty of time to build up a move for the next cycle.
