Potential signal:
- I would be a buyer of this market on a break above the $4000 level, if we stay above that level for an hour.
- At that point, I would be putting a stop loss at the $3700 level and holding on for a move to the $4500 region.
The Ethereum market has suddenly become very interesting, as the Bitcoin market has broken above the $100,000 level, which has been on the minds of traders for some time now. With this, we have to ask the question as to whether or not the Ethereum market will follow suit? It typically will pay attention to Bitcoin and move in the same direction overall.
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Technical Analysis
The technical analysis for this market is pretty bullish, as the markets are facing a massive resistance area in the form of $4,000 above. If the market were to break above the $4000 level, it would obviously be very bullish, as it is a large, round, psychologically significant figure, and an area that’s been important multiple times. With this being the case, I think that breaking above there would send it quite a bit of “FOMO trading” into the picture, showing the possibility of some type of melt up.
On the other hand, if we do pull back, and I think that’s a very real possibility, the market could drop all the way down to the $3600 level, an area that previously had been significant support. The market sold that as a bit of a barrier previously, and I think between there and the $3500 level we would find plenty of value hunters willing to get involved in the Ethereum. However, we probably don’t see that happen unless we get some type of significant pullback in Bitcoin, which has been on fire as of late. Alternatively, if we break above that $4000 level, then we just simply go higher.
I have no interest in shorting Ethereum, because quite frankly a lot of the altcoins are on fire as of late, and it’s worth noting that most of them operate on the Ethereum ecosystem anyway, so it does in a roundabout way drive up demand for ETH regardless.
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