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.

• 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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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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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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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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A strengthening US dollar could be one of the major downfalls for this market as well, and of course risk appetite in general is a very fluid situation overall.

• The Ethereum market struggled a bit Monday as we continue to see the $1800 level above offer quite a bit of resistance.
• The market looks as if it is more likely than not topping out for the short term, as Ethereum got a little bit ahead of itself.

The $1800 level has been imported a couple of times and certainly offers quite a bit of supply. You can see that we shot straight up in the air to reach the $1800 level, and then have pulled back in more of a grind lower. At this point, you have to ask yourself the simple question: “Which one of these is more likely to be more sustainable?”

Economic Impact

Ethereum has gotten a bit of a boost due to the idea that upgrades are coming by September, but we have been disappointed by Ethereum more than once. Quite frankly, as long as there’s a lot of concern out there when it comes to the economic outlook, that has a lot to do with what happens with crypto. Remember that crypto is far out on the risk spectrum, so we need to see a lot of money flowing into the “hot markets” that make up the crypto world.

The 50-day EMA sits just above the $1200 level and is starting to curl higher. It’s sitting on top of the previous consolidation area, so I do think that the 50-day EMA could come into the picture to offer support. If we were to break down below there, then it’s likely that Ethereum will test the lows. On the other hand, if the market were to break above the $2000 level, it’s possible that we could go much higher. At that point, if the market were to break above the $2000 level, it would be a major shift in this market, perhaps opening up the possibility of a longer-term bullish run. That being said, I don’t necessarily think that’s going to be easy to happen, but it is something that we need to keep in the back of our mind. A strengthening US dollar could be one of the major downfalls for this market as well, and of course risk appetite in general is a very fluid situation overall.

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Ultimately, this market goes lower.

• Ethereum was very quiet on Wednesday as with very little in the way of momentum. 
• The market has been consolidating for a while
• We are going to simply trade back and forth between the $1250 level above, and the $900 level underneath.
• As the market continues to go back and forth, it looks as if we are either trying to build a bit of a base, or we are getting ready for the next leg lower.

The Next Leg Lower

At this point, I suspect that the next leg lower is probably going to be the most likely outcome. Because of this, the market is more apt to simply grind away until we get some type of fundamental reason to get moving. If we were to break down below the $900 level, then it opens up the possibility of a move down to the $500 level. The market could get down there rather quickly on some type of bad news, not the least of which would be a strengthening US dollar which seems to be all but a formality at this point.

If we were to break above the $1250 level, then it’s possible that we could go to the 50-day EMA which currently sits at the $1500 level. After that, the $1750 level is the next target, which we have broken down from. I highly doubt that we can get above there, and I think that as long as we have a strengthening US dollar and a tightening Federal Reserve, it’s difficult to imagine that some of these more risk appetite-sensitive assets will do well. In fact, Ethereum is going to get smoked as long as money is not willing to take a significant amount of risk as this is about as risky as it gets for most institutions.

Fading rallies continue to work from what I can see, especially as Ethereum 2.0 drags on, as we have no real catalyst for the market to go higher. However, the Federal Reserve will eventually change its tune, and when it starts to talk about loosening monetary policy, it’s at that point that crypto, and by extension Ethereum, could get a bit of a push to the upside. Ultimately, this market goes lower.

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.

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.

One thing that could help is if the Federal Reserve decides to loosen monetary policy again, which they almost certainly will do sometime late next year.

Ethereum did very little on Monday as it looks like the $1250 level is going to continue to offer a little bit of the barrier. At this point, the market looks as if it is ready to roll over again, perhaps challenging the $1000 level. While the recent price action has been somewhat encouraging, the reality is that Ethereum has a long way to go before turning the attitude of the entire market around.

Quite frankly, if Bitcoin cannot pick itself off the floor, there’s no reason to think that Ethereum will. This is a “fade the rally” type of market until something drastically changes, not the least of which would be a final completion of the rollout of upgrades for the network. Beyond that, there have been a lot of security breaches on Ethereum-based ecosystems, although not necessarily Ethereum itself.

While I do think that Ethereum has some type of future, we are still trying to figure out what that future is. Yes, I am fully aware of the fact that we are heading into “crypto winter”, a time when you can accumulate vast amounts of crypto in an attempt to benefit quite nicely once things start to take off. This is my plan, but I’m only going to do it with coins that I believe are going to have a future. Luckily, Ethereum is most certainly one of those.

That being said, I do think that we have further to go to the downside, and even if we do start to turn things around from this day forward, we have a long way to go before any significant recovery would have occurred to make me think that I had “missed the trade.” I will think of this more or less as a savings account, perhaps adding a bit here and there, accumulating over the next several months or years as we try to carve out some type of basing pattern.

One thing that could help is if the Federal Reserve decides to loosen monetary policy again, which they almost certainly will do sometime late next year. This is because the economy is almost positively going into a recession, so eventually they will have to let go of the inflation argument, if for no other reason than to save their own portfolios.

Even if you are bullish, you have plenty of time to get involved.

The Ethereum market went back and forth on Wednesday as we are sitting just below the $2000 level. The $2000 level is a large, round, psychologically significant figure, and it makes sense that we have seen a lot of choppy behavior. That being said, it’s worth noting that we have pulled back a little bit overall, as we continue to see sellers get aggressive.

Furthermore, keep in mind that Ethereum is presently going through the process of trying to expand the network. While the expansion continues to be very sluggish, there is a real lack of demand for Ethereum. Furthermore, the markets have been in a downtrend for a while and based on the selling pressure, we have been forming a descending triangle, something that people will look at as a potential signal as well. If we do break down from here, it’s likely that breaching the $1900 level will open up a move back down to the $1700 level, an area that has been the recent bottom for the market. Quite frankly, Ethereum is going to struggle right along with the rest of the crypto market as it seems like there is no real catalyst to go higher.

Even if we were to rally from here, the $2200 level should offer resistance, and if we break above there it’s likely that the 50-day EMA at the $2500 level could be a target as well. I have no interest in buying Ethereum anytime soon, because there is more than enough time to get involved in this market if it does choose to rally. I believe at this point all crypto markets are toxic, although there are a couple of smaller ones that are good for trading. I would look to fade any rally in Ethereum in the short term, and don’t even have a scenario in which I would get aggressive in this market to the upside unless the Federal Reserve changes its overall attitude. The central bank does not look likely to do so, so risk appetite is going to be miserable to say the least. This is one of the biggest problems that Ethereum and the rest of crypto will continue to face. Ultimately, even if you are bullish, you have plenty of time to get involved.

The market is likely to see a lot of volatility and concern.

The Ethereum market bounced a bit on Monday as the $2000 level continues to be somewhat important. There is a lot of psychology attached to this area, so it is not a huge surprise to see the market rally. Furthermore, we have seen the market bounce around between $2000 and $2100, and I believe that will continue to be the case over the longer term. The market will continue to be noisy, and of course, pay close attention to the $2000 level.

There is a massive candlestick from two weeks ago that reached all the way down to the $1730 region, and if we were to break down below there, then it is likely that the market will dump quite drastically. At that point, Ethereum could enter into a bit of a freefall, as the crypto markets in general are struggling. The crypto markets are going to continue to suffer at the hands of risk appetite being eviscerated. As long as there are concerns around the global economy and central banks around the world tightening, it is difficult to imagine that a lot of money is going to flow into heavy risk assets at the same time, as has been demonstrated by stock markets, tech companies, and other cryptos.

If we do rally from here, is likely that the $2500 level will be significant resistance, and I think it is going to be difficult to break above there. Any signs of exhaustion in the form of a long way to the upside is going to be my signal because I do believe that Ethereum has further to go to the downside. The market breaking above the $2500 level is a good sign, but there is also the 50-day EMA which sits right there as well. With that being the case, the market is likely to see a lot of volatility and concern.

At this point, I do not have any interest in buying Ethereum or any other crypto, due to the fact that the markets have sold off so viciously that I think that even if we were to turn things around, you have all the time in the world to start building a position. Furthermore, you can make an argument for a little bit of a descending triangle over the last couple of sessions, so there is that to worry about as well.