Ethereum Ready to Test Resistance
- Ethereum shows recent momentum
- Testing major moving averages
- Has obvious support below
Ethereum has rallied over the last several days, although it slowed down over the weekend. By doing so, Ethereum has shown the resilience that was necessary after the recent beating the cryptocurrency has taken. That being said, it isn’t out of the woods yet, and there is a significant amount of resistance above that is going to come into play.
Crypto has underperformed drastically lately as money flew away from fiat currency and into precious metals. At the same time, crypto was simply shunned.
Technical resistance above
The market has a lot of technical resistance just above current pricing. The 200-day EMA is currently trading just above the $200 level. That is also a figure that will attract quite a bit of attention by itself. In fact, you can see we have already been there twice, and both times have seen sellers jump back into this market.
That being said, though, the market looks very likely to find another attempt in the cards.
The weekend attempt to break out was due to the sympathy of the Bitcoin market. After the Chinese president suggested that crypto was a viable alternative, there was a sudden spike over the weekend. However, the real test will come when institutional traders are involved.
The Monday candlestick does show a bit of resiliency, and the market is now above the 50-day EMA, which is a longer-term trend-trading mechanism. It looks as if it is trying to form support.
Beyond all of that, the 200-day EMA will cause a lot of interest in the market. The market currently sits between these two moving averages, but what should be noted is that the initial spike higher ended up forming a shooting star.
The shooting star is very negative, but if the market breaks above there, then one would have to think that the 200-day EMA would be targeted next. A break above that level would be a very bullish sign from not only slicing through a major moving average, but also through taking out a large, round, psychologically significant figure.
Trading Ethereum going forward
At this point, it’s highly possible that short-term pullbacks will continue to offer buying opportunities. However, if the shooting star from the Saturday trading session was broken to the downside, it would then be a sign that the market was to reach down towards the $160 level.
The market could very well become extraordinarily bearish again. Regardless, it’s most likely to be a very choppy set of conditions, so a certain amount of resiliency should be needed if you plan on going long of this market.