ETH/USD has done very little during the trading session on Monday, as we continue to see the market look as if it is threatened. Recently, we had seen a lot of upward momentum due to the network merge and the upgrade coming, as it has had a lot of enthusiasm enter the Ethereum market. At this point, the market is sitting just below the 50 Day EMA, which is a technical indicator that a lot of people pay attention to. If we break above the 50 Day EMA, we still have a lot of selling pressure above there to keep in mind.

Keep in mind that the US dollar has been strengthening for a while, and that does open up the possibility of a bigger move. The US dollar strengthening also works against the value of Ethereum and other risk assets, so it all ties in together quite nicely. Because of this, I think it is probably only a matter of time before this market breaks down. It’s also worth noting that the 200 Day EMA’s is just above the $2000 level, which is where we had pulled back from previously.

Market can unwind

On the downside, the market could very well drop to the $1200 level, which is the recent resistance barrier that we just broke above. A bit of “market memory” could come into play, and therefore you need to be cautious about that region. If we do slash through that level, then it’s likely that the market could unwind quite drastically.

On the upside, we need to see a daily close above the $2000 level in order to think that we can break out for a bigger move. This is not to say that we necessarily need to melt down, just that the market is obviously finding the area around $2000 very difficult to overcome.

• With the strengthening US dollar and a severe lack of risk appetite, it does make a lot of sense that Ethereum has taken a bit of a beating.
• I suspect that we have further to go to the downside given enough time.
• Be advised that we need to be very cautious and could be looking at an opportunity to buy Ethereum at much lower levels.
• If you believe in it longer-term, think of this as value that’s about the show itself.

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The ETH/USD markets have fallen significantly during the trading session on Friday to lose almost 7% and test the 50-Day EMA. In other words, the rally in Ethereum suddenly finds itself under extreme pressure. This furthermore will confirm the possibility of the risk appetite fading rather quickly, as the stock markets have seen similar moves over the last couple of days.

Ethereum has been rallying quite hard due to the idea of the network upgrade moving forward. Ethereum has led the cryptocurrency markets in general, but at this point in time, I think it’s worth noting that Bitcoin has also fallen rather hard, so it’s all taking a bit of a beating during the day. The fact that Ethereum led the market is probably not a huge surprise, but it’s also worth noting that the $2000 level has been like a hard top in this market.

Will there be explosive moves?

The 50-Day EMA does cause quite a bit of technical support, but at this point, there’s no real reason to think that the markets can bounce just because we’re there. It’s probably worth noting that the 50 Day EMA underneath and the 200 Day EMA above causes a bit of a squeeze as well, so I think we are about to get some type of explosive move. If I had to bet, it would more likely than not end up being a move to the downside. This will be especially true if we start to see a lot of risk appetite disappear in other markets as well.

On the other hand, if we do get a sudden “risk on move” around the world, that could probably help Ethereum as well.

• If Ethereum can break above the $2000 level, that would obviously be a major victory, and it most certainly would be positive if we can break above the 200 Day EMA, sitting right around the $2100 level.
• Any move above there has a lot of technical analysts looking at this as a technical uptrend. We have to assume that the theory would have quite a bit of follow-through at that point.
• I think we have a rather noisy move ahead of us, and more likely than not it’s going to be to the downside. $1200 could be targeted on the move lower, perhaps even all the way down to the $900 level.

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In the short term it looks as if the buyers are willing to at least defend this market.

• The Ethereum market rallied a bit during the trading session on Thursday to reach the $1875 level.
• We are still looking at the $2000 level as a potential resistance barrier, and therefore it’s not until we break above there that I would consider this market broken out to the upside.
• The 200 Day EMA above is also offering quite a bit of psychological and technical resistance as well.

Ethereum Hanging Around the $2000 Level

Keep in mind that the Ethereum market is stuck between the 200 Day EMA above, and the 50 Day EMA below. This typically means that there is a bit of a squeeze coming, and the fact that we are hanging around the $2000 level also suggests that there are a lot of people out there looking at this market currently. Because of this, I believe that it is probably a situation where we are going to continue to see volatility pick up and therefore a lot of confusion.

If we break down below the 50 Day EMA, then the $1500 level will almost certainly be targeted. Breaking down below that level then opens up the possibility of a move down to the $1200 level, which is the top of the previous consolidation area that we had broken out of. The $1200 level should cause quite a bit of noise, and therefore I think it could be a massive support zone.

On the other hand, if we can break above the 200 Day EMA, then Ethereum could really start to take off to the upside, perhaps opening up the possibility of a bigger move to the $2300 level, followed by the $2500 level. Keep in mind that there is a certain amount of momentum behind the Ethereum market, as we have seen big moves towards the upgrade of this network. That obviously is very bullish for this market, and it’s worth noting that Ethereum has outperformed other cryptocurrencies as a result.

Given enough time, we will have to make a bigger decision, but in the short term it looks as if the buyers are willing to at least defend this market. It is because of this that even if cryptocurrency overall starts to fall, I believe that the Ethereum market will probably outperform going into the future as well. The one caveat would be if there is some type of pickup in the implementation of the upgrade.

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People will be paying close attention to any little bit of a pullback as an opportunity to build a longer-term “buy-and-hold” scenario.

• Ethereum fell a bit on Tuesday as we continue to look at the $2000 level above as a major resistance barrier.
• If the market was to break above the $2000 level, that would obviously be a very bullish sign and could send the Ethereum markets much higher.
• There are a lot of crosscurrents at the moment that continue to throw things around.

Ethereum Technical Analysis

The last couple of candlesticks have been shooting stars, and that does suggest that perhaps we are going to continue to see a little bit of downward pressure. The $1800 level is an area that had previously been the beginning of this resistance barrier that we are in and it’s likely that we would see is a little bit of a reaction. That area should in theory be a bit of a small support level as “market memory” could come into the market. Ultimately, this is a market that I think will continue to be very noisy, and it’s likely that what we see is a situation where buyers could come back in and pick up little bits and pieces of Ethereum, but you should keep in mind that the $1600 level being broken to the downside could send this market lower.

Ethereum does have the distinction of the major upgrade coming, so it’s likely that will continue to keep Ethereum a bit stronger than many other cryptocurrencies around the world. Nonetheless, we have reached a major inflection point and it looks like a short-term pullback is more likely than not going to be the case. The markets will continue to be volatile, so you do need to be cautious about your position size, but more often than not we are going to see traders look at this through the prism of a longer-term standpoint. After all, if Ethereum is going to turn around and show signs of life, it is possible that we will turn things around and see a major breakout. That could take a while, and I think what we have is a situation where people will be paying close attention to any little bit of a pullback as an opportunity to build a longer-term “buy-and-hold” scenario. We are in an area that could be thought of as an accumulation zone.

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If you are a longer term trader, look at pullbacks as a potential way to start picking up a bit of value.

• The ETH/USD currency pair rallied slightly Friday as we continue to see the Ethereum market recover.
• The Ethereum market is a bit different than other crypto markets, due to the fact that the market is looking at an upgrade later this year, something that has been waited for over the last several years.
• Ultimately, this is a market that I think continues to pay close attention to the outcome of that merge, but at this point in time, it looks as if everything is still on track to get done by the end of fall.

Technical Analysis

From a technical analysis standpoint, it’s obvious that there is a range of resistance from the $1800 level that extends up to the $2000 level. In this area, I would anticipate that resistance comes into the picture, but it’s worth noting that even though we formed a shooting star for the Thursday session, so far it appears that Friday is willing to look beyond it.

The market is likely to continue seeing a lot of noisy behavior, but if we get a daily close above the $2000 level, it would be a major breach of resistance, and it’s likely that the market would continue to go higher. However, if we take out the Wednesday candlestick, at that point I think we probably have a deeper correction ahead. It certainly looks as if the Ethereum market is resilient, and maybe a bit of an outlier when it comes to crypto, due to the fact that there are network-specific reasons to think that it could strengthen.

Nonetheless, there are a lot of economic headwinds out there, so it’s difficult to imagine that the market will simply take off easily. If we get a major “risk off” type of scenario, that could greatly influence the Ethereum market, making it sell off quickly. Nonetheless, out of all the crypto markets right now, Ethereum is by far the strongest, so I continue to look at it through the prism of the “best case scenario for a bad case market.” Ultimately, this is a market that continues to see noise more than anything else, so if you are a longer term trader, look at pullbacks as a potential way to start picking up a bit of value.

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It would not take much to spook the market again and send risk assets such as Ethereum tumbling.

• Ethereum rallied again Monday as traders continue to bet on the upgrade coming down the road as a positive sign.
• It’s worth noting that we are in the beginning area of a major resistance barrier that starts at the $1800 level and extends all the way to the $2000 level.
• It should be noted that Ethereum is outperforming most other markets right now, including Bitcoin.

Market Anticipates Successful Merge

Whether or not “The merge” comes through without a hitch is a completely different question, but as things stand right now, it looks like the market is willing to believe that. Whether or not Ethereum is the future is a completely different question as well, but from a technical analysis standpoint, it certainly looks as if market participants are at least trying to make that argument.

Breaking above the $2000 level brings into focus the 200 Day EMA, which is at roughly $2250 and diving lower. I think that will be difficult to get through, and it’s more likely than not that we will eventually get some type of pullback that we can focus on. Currently, it looks like we are in more of a grinding phase than anything else. Remember that there are a lot of concerns out there when it comes to risk appetite, and the CPI numbers coming out of the United States much cooler than anticipated gives a little bit of credence to riskier assets such as crypto going higher.

That being said, we are still in a very tenuous situation with inflation running over three times with the Federal Reserve likes. In other words, it would not take much to spook the market again and send risk assets such as Ethereum tumbling. I’m not necessarily calling for some type of meltdown, just that we still have a lot of downside risks.

On a breakdown, I would anticipate that the 50-day EMA, currently near the $1350 region and curling higher, could offer a little bit of dynamic support. It’s also very possible that we could see the $1500 level offer a bit of support as well. Pay attention to Bitcoin, because if it starts selling off drastically, that will have a bit of a “knock-on effect” over here as well. Granted, Ethereum seems to be leading the way but over the longer-term Bitcoin is still the king.

Over the longer run, I do think that Ethereum will take off, but I think we have a long way to go before we are “all clear.”

• The Ethereum market rallied a bit again during the trading session, but as you can see, we continue to hear a lot of noise just above current pricing.
• There is a major resistance barrier between the $1800 level and the $2000 level.
• If we can break through all that, then it would be a very bullish sign, but I just don’t see how that happens without some type of massive momentum-building exercise going on.

Pay Attention to Risk Appetite

Signs of exhaustion coming into the picture could get things going to the downside, in a bid to pull back to the 50-day EMA. The 50 Day EMA is currently near the $1380 level, so it’s likely that could be a target for a serious breakdown. Pay close attention to the risk appetite of traders around the world, as it could give you an idea as to how Ethereum plays out. After all, crypto is pretty far out on the risk spectrum, so traders need to feel fairly comfortable putting money to work in these riskier assets.

If we were to break above the $2000 level, it could be a severe change of trend, perhaps opening up this move to a much bigger run. This could be due to the merge coming, as well as quite a bit in the way of upgrades throughout the year. There seems to be good news on that front, but we have not been able to break out seriously at this point, so you have to keep that in mind as well. I think more likely than not, we are in the process of trying to build up a bit of an accumulation phase. That being said, the market is very noisy, so you have to be cautious about that as well.

On the downside, if we break down below the $1200 level, that could send Ethereum much lower. At that point, it’s likely that we could go down to the $900 level. The $900 level getting broken through could open up a move down to the $400 level for Ethereum. Ultimately, I think this noisiness will continue, so you should be cautious about putting too much into the market at one time, especially as the market has to worry about so many external influences as well. Over the longer run, I do think that Ethereum will take off, but I think we have a long way to go before we are “all clear.”

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Buying on dips could be used as a way to pick up a little bit of value here and there for a longer-term position.

• Ethereum rallied Friday, but there is also a significant amount of resistance above that continues to cause major problems.
• The major source of resistance is the $1800 level, which extends to the $2000 level.
• Because of this, I think we still have a lot of concern out there when it comes to any type of rally.

Ethereum Likely to Struggle

Ethereum is going to continue to be somewhat bullish in terms of crypto markets, mainly due to the fact that “The Merge” is coming, and it could bring in good things for the network. The reality is that there is still a lot of work to be done before you can clear all of this noise above, so I think Ethereum will continue to struggle in general. If the market were to break down from here, there are a couple of places where I would expect to see support, not the least of which would be the 50-day EMA which is sitting just above the $1200 level.

The $1200 level is an area that extends down to the $900 level and has been a massive support. If we were to break down below that level, then it’s likely that we could go much lower. At that point, it’s likely that we would see Ethereum drop drastically. I think given enough time, we will eventually try to build up enough momentum and reason to go higher. Ultimately, this is a market that will continue to see a lot of volatility.

The market will continue to be very noisy, but I think more than anything else we will continue to see a lot of questions when it comes to risk appetite. Keep in mind that the risk appetite is going to drive what happens in this market. This is the same with all crypto, which has been trying to build up a little bit of a presence, but right now it’s been difficult to get a bit of momentum going. With this being the case, I think you will continue to see a lot of back-and-forth, and then eventually momentum. I do think that we will see the market recover, but I’m not convinced that we are there quite yet. That being said, buying on dips could be used as a way to pick up a little bit of value here and there for a longer-term position.

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Look at significant pullbacks as an opportunity to build up a larger position for a longer-term trade and a turnaround and start the next bullish market.

• Ethereum continues to look vulnerable as we have drifted lower yet again.
• Ethereum has recently seen a bit of abuse due to the idea of the upgrade coming in September, but whether or not that’s the case is totally irrelevant.
• There are a lot of moving pieces when it comes to the overall risk appetite of traders around the world, so you need to pay close attention to what’s going on in multiple markets. Risk appetite is so messy at the moment that you are going to have a serious issue looking for clues.

Will the Ethereum Rally?

Ethereum has no business rallying over the longer term, at least not until other safer assets start to attract attention as well. As long as we have so much in the way of uncertainty when it comes to that risk appetite, Ethereum and other crypto assets are going to continue to struggle. It’s worth noting that we reached the $1800 level, which is the beginning of a significant resistance barrier that extends all the way to the $2000 level. It’s not until we break above all of that that I think the trend itself has changed.

Notice how we had a nice shot higher for a couple of days, and then have done almost nothing. This tells us that the market will continue to be a little hesitant to continue going higher, and the fact that we pulled from the first signs of resistance also suggests to me that Ethereum is just not ready to go higher.

Underneath, the 50 Day EMA will offer a little bit of dynamic support, as it is starting to curl to the upside. The $1200 level underneath is the top of a consolidation area that extends all the way down to at least the $900 level. Ultimately, this is a market that has more likely than not put in some type of bottom, but if we were to break down below that area, then the market could fall apart. I think at this point in time we need to be very cautious about trading this market, but I do look at significant pullbacks as an opportunity to build up a larger position for a longer-term trade and a turnaround and start the next bullish market. Ultimately, every time we pull back there will be plenty of longer-term traders willing to get involved.

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In the short term, expect a lot of choppy behavior in more of a sideways type of market.

• Ethereum markets rallied ever so slightly during the day, gaining 2%.
• The market has recently seen a lot of choppy noise in this area, and I think that will probably continue to be the case as we are trying to break out, but do not have a catalyst at this point.
• The $1800 level above is significant resistance that extends to the $2000 level, so breaking through all that is the goal by the bullish traders out there, but I don’t necessarily think that they have the momentum, at least not at the moment.

It’s All About Risk Appetite

Pay attention to risk appetite overall, because obviously crypto is pretty far out on that spectrum. As long as risk appetite is strong, that does help crypto, and then by extension Ethereum. Ethereum is also going through a Renaissance in the sense that the upgrade is coming. This is part of what has been driving Ethereum higher, but now we have to ask serious questions, not the least of which would be whether or not it actually happens on time.

A pullback at this time would make a certain amount of sense, with the 50-day EMA underneath offering support, just above the $1200 level. That would be an ideal area for support to come back in and lift the market, assuming that the buyers are willing to make it stand. That being said, if the market were to break down below the $1200 level, then it’s likely that will we go back down to the $900 level. Anything below there could open up the floodgates the much lower pricing. I don’t necessarily think that will happen either, at least not in the short term.

Pay attention to the central bank situation, because if the Federal Reserve continues to flex its muscles and tighten monetary policy, that does tend to work against risk assets like Ethereum. Granted, Ethereum is in its own world at the moment due to “The Merge”, but that doesn’t mean that it cannot start selling off with everything else. If we were to break above the $2000 level, it would almost certainly kick off the next major bull run, but I don’t think that happens without some type of outside catalyst. In the short term, expect a lot of choppy behavior in more of a sideways type of market.

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