- The ETH/USD market rallied a bit during the trading session on Monday, getting over 7%.
- However, you need to keep in mind that a 7% gain from here is much smaller than it would have been a couple of weeks ago. It most certainly is quite a bit smaller than it was a year ago.
- The market is likely to continue seeing a lot of noisy behavior, so at this point, I’m not necessarily sold on the idea of Ethereum suddenly taking off.
If we break down below the bottom of the candlestick for Monday, you can see that there’s been a little bit of support in that area, and it’s likely that we could drop down from there to reach the $1000 level. The $1000 level is an area where we have seen a lot of action in the past, and obviously, the $1000 level will have a lot of psychology attached to it. Breaking down below the $1000 level would be extraordinarily negative, and that could open yet another leg lower. Ethereum has recently been a little bit negative but previously had seen a massive move higher based upon the idea of “The Merge” coming soon, and the idea that Ethereum will become much cheaper as far as transactions are concerned, and a whole host of other features.
Bounce not Likely to Last
The reality is that the market has more likely than not already priced this in. Furthermore, you must keep in mind that risk appetite is going to be a major driver of what happens in this market, as well as everything else related to cryptocurrency. I don’t necessarily think that the market is out of the woods yet, and I would fully anticipate that we drop again. However, the question at this point is whether the Ethereum market rallies toward the 50 Day EMA, and then beyond, or if it just starts falling.
A lot of this is going to come down to central-bank behavior, and how hawkish they are. Pay attention to bond markets, because if interest rates continue to rise, that would of course work against risk appetite, and thereby work against Ethereum. Ethereum does seem to be one of the better performers in this financial asset class over the last several weeks.
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