- Cryptocurrency continues to grind lower overall
- Ethereum testing area of previous resistance
- Major round figure just below
Ethereum markets have been positive over the last 48 hours, but at this point we are still very much in a downtrend. We have pierced the $175 level, but then turned around to bounce quite significantly. At this point, it’s obvious that the Ethereum level is lagging behind Bitcoin, so the question now remains as to whether it can play catch-up. Typically, in the past we have seen most cryptocurrencies move in the same direction, so perhaps the markets have become mature enough to differentiate between the varying crypto markets.
The crucial $150 level
The crucial $150 level underneath is what should be essentially considered a “base” in the market. Perhaps it will even extend all the way to the $175 level. Recently, the market has been attracting some flow that could turn the coin around. Currently, the 50 day EMA is sloping lower and has already acted as resistance. That should now attract a certain amount of flow and act as a nice target for the buyers.
If the $150 level underneath has previously been very supportive and resistant, it’s very likely that it will attract a lot of attention. However, if it were to be broken to the downside, this market will go looking towards the $100 level rather quickly. That would be an extraordinarily negative turn of the market for Ethereum.
The Bitcoin market
While the Ethereum markets have been falling rather steadily, the Bitcoin market has rallied quite nicely. At this point, one has to wonder whether or not the Bitcoin market will eventually become expensive enough for people to start looking at other crypto markets to protect wealth. If that does end up being the case, Ethereum will perhaps be one of the first markets that people become attracted to, as it is a large one. With this in mind, keep an eye on the Bitcoin market, as it could send more money over to this market.
The play going forward
It’s quite difficult to buy a market that has been broken down, so it’s not easy to just jump in with both feet. However, if we were to break above the $200 level, then it would show a significant turnaround and perhaps even a trend change. In the meantime, it’s likely best served by dipping your toe in the water slowly, buying little bits and pieces of Ethereum on the way. If we do in fact form a base, this doesn’t happen all at once, and it does tend to be rather volatile. If that’s going to be the case, then this should bring plenty of opportunities to buy Ethereum on short-term pullbacks. However, keep an eye on that $150 level. If it gets broken to the downside, then this market will start to fall apart.