We are getting relatively close to “The Merge” but is becoming increasingly obvious to me that perhaps we are “buying the rumor and selling the news” when it comes to this market. 

The ETH/USD has fallen hard during the trading session on Friday, as Jerome Powell gave his Jackson Hole speech. He reiterated that the Federal Reserve was in fact going to remain very hawkish, and therefore tight monetary policy should continue to work against the value of risk appetite-related assets such as Ethereum.

Furthermore, we are getting relatively close to “The Merge” but is becoming increasingly obvious to me that perhaps we are “buying the rumor and selling the news” when it comes to this market. The market now looks as if it is going to break down below the $1550 level. If we break it down below there, then it’s likely that we see the $1500 level would be potential support. If the market were to break down below there, then it’s likely that we could go lower, perhaps down to the $1200 level.

A Lot of Volatility Ahead

• At the $1200 level, there is a previous area of consolidation the traders will be paying close attention to, that extends down to the $900 level.  This is an area that has been important previously, so breaking through all of that it’s likely that Ethereum gets crushed.
• Breaking down below the $900 level would bring the next move lower.
• This would almost certainly coincide with a stronger US dollar, something that looks very likely to be the case going forward.

On the other hand, if the market were to turn around and break above the $1750 level, it’s likely that the market goes looking to the $2000 level. The $2000 level is a large, round, psychologically significant figure, and an area where we have the 200-Day EMA approaching. Ethereum is going to suffer at the hands of risk appetite being suppressed, and I think it’s also probably worth noting that this chart looks a lot like the NASDAQ 100, which suggests that the market is more likely than not going to fall right along with stocks, just as Bitcoin has. All things being equal, this is a market that I think continues to see a lot of volatility, but ultimately for people who are long-term believers in Ethereum, any significant selloff would be a nice opportunity to pick up bits and pieces of Ethereum to accumulate a larger position. It looks like the sellers are starting to jump into this market.

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I suspect that the $100 level will be the “line in the sand” when it comes to the overall trend. 

The West Texas Intermediate Crude Oil market had a rough trading session on Friday as most assets did. We sliced through the $110 level, and the 50-day EMA. The size of the candlestick is rather brutal, and it suggests that we will have a further downside. Ultimately, I think this is a market that will find buyers eventually, so I’m waiting for signs of stabilization that I can take advantage of. I have no interest in shorting oil anytime soon because it has been so out of control bullish. The market continues to dance between the idea of a lack of supply, but at the same time the global economy slowing down. Because of this, I think we continue to see a lot of noisy behavior and it is probably only a matter of time before we have to break in one direction or the other.

The $100 level underneath will be a significant support level, so you should pay close attention to it. Furthermore, there is an uptrend line that coincides somewhere in that general vicinity, so that’s also another reason to think that there is technical support. That being said, there are a lot of concerns out there about global growth, so that could continue to put a bit of a damper on crude oil.

Biden is going to the Middle East to beg for oil from the Saudi Arabian government, so there is the potential that has an effect on the market. However, I don’t necessarily think that Saudi Arabia feels the need to acquiesce, so at this point, I think it comes down to the need for demand destruction.

It is worth noting that gasoline demand has dropped in America, and that will catch some people’s attention. Ultimately, this is a market that will favor the upside, but we may have a little bit of a pullback ahead of us in order to find the support. I suspect that the $100 level will be the “line in the sand” when it comes to the overall trend. As long as we can see above there, I think there is still a chance we see the highs again. If we break down below the $100 level, then I will reassess the entire situation.