Ethereum continued to go sideways Friday as crypto is all but dead. The market will continue to struggle with the Federal Reserve monetary policy. As long as monetary policy continues to tighten, cryptocurrencies will struggle. $1100 level that will continue to be an area of interest, but I suspect that the $1000 level is much more important. Because of this, I anticipate that every rally will get sold into, just as we have seen over the last several months.
If the market were to break above $1200, then we could have a little bit more of a shot at going higher, but right now I just don’t see that happening. If we did clear $1200, it’s obvious to me that it will only be a “sell on the rally” type of situation. I do not think this ends anytime soon, as we have almost certainly entered a massive “crypto winter.”
On a dip below $1000, the market will almost certainly go to be $900 level again, where we had previously bounced from. Breaking below that level opens up a new flush lower, perhaps down to the $500 level. At the end of the day, we need to pay close attention to this market, because Ethereum will lead the way for most of the smaller cryptocurrency markets.
US dollar strength will continue to be a major issue as well, not to mention all of the fraud and Ponzi schemes that have been exposed in this asset class. Ultimately, I do think this coin will survive, but there are several out there that will not. The attitude of the market is still very poor, and I do think that it is probably only a matter of time before we break down even further, so although I would like to build a large position, I suspect we have all the time in the world.
As for a bottom, I suspect it’s probably closer to the $400 level again, but we will have to wait and see. If the Federal Reserve changes its overall attitude, then it’s possible that we could see the market turnaround quicker, but I would not hold my breath at this point. Selling rallies will continue to be the way to play this market, unless you are an investor, which means you should be waiting for stagnation of a longer timeframe to take advantage of value.
