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I think we have a situation where you may be able to find a little bit of value on a dip.
- Ethereum markets pulled back just a bit on Monday as we continue to see the $2000 level offer a significant amount of resistance.
- The $2000 level obviously has a lot of psychology attached to it, and it’ important to pay close attention to this big round number.
Pullback Ahead
The fact that we are forming a bit of a shooting star again suggests that we are probably due for a pullback. When you look at the total market capitalization of cryptocurrency, it is forming a very similar chart pattern, with the $1.18 trillion level being like a brick wall. I think at this point we are ready to see crypto in general pull back, which makes quite a bit of sense considering that it has seen such a massive turnaround in the negativity as of late. That being said, we have a long way to go until we get rid of all of that negativity, especially considering that the run-up to this level has been relatively quick.
To think that the negativity in markets is suddenly going to disappear is a bit of a stretch, due to the fact that there are a lot of moving pieces out there that suggest trouble ahead. That being said, I don’t necessarily think that Ethereum is suddenly going to sell off drastically, mainly due to the excitement around the massive upgrades that are coming this year. It looks like they are on track to happen sometime this winter, perhaps even during the fall. This is something that has disappointed Ethereum holders for quite some time, so it is a good sign that the market has been getting good news steadily.
If we break above the $2100 level, I think that would rip out all of the massive selling pressure, and could open up the possibility of a move to the $3000 level. I don’t necessarily think that the move would be easy to do, but it is something that you need to keep your mind on. The 50-day EMA sitting underneath and rising could be the target for any type of significant pullback, so I think we have a situation where you may be able to find a little bit of value on a dip. Longer-term holders will almost certainly appreciate this.
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