At this point, we are simply building up a bit of a base so that we can continue the overall uptrend.
Ethereum markets dipped ever so slightly on Wednesday but continued to find buyers on dips. It looks like we are trying to form a little bit of a base in order to recapture some of the recent losses. In fact, if you look at the bigger picture, you could even make an argument that we are forming a “falling wedge”, which is technically a bullish sign. That being said, it is not one of my favorite patterns, but it is something that some people will be looking at.
Just above, we have the 50 day EMA hanging about at $3995 and sloping lower, so that will have a certain amount of technical influence on what is going on, but the market has sliced through the 50 day EMA more than once, so I would not be overly concerned about this. If we can break above there, then it should suggest that the market is probably going to be testing the $4100 level, perhaps then opening up the possibility of a move towards the $4500 level given enough time. I do like Ethereum, and I do believe that we will eventually go higher, especially considering all of the new improvements to the network that will be coming over the next six months.
Having said all of that, that does not necessarily mean that we are going to simply take off to the upside, but what we will more than likely see is a building of bullish pressure over the longer term, giving us an opportunity to build up a position and then perhaps take advantage of the “Ethereum 2.0” rollout a few months now. I do believe that the $3500 level should offer support, and most certainly the 200 day EMA underneath at the $3195 level will as well. I have no interest in shorting Ethereum, although I do certainly recognize that there is a lot of downward pressure on it currently. Regardless, I think the real momentum-building move would be Ethereum breaking back above the $4000 level, and of course you need to keep an eye on Bitcoin, because it does have a bit of a “knock on effect” in this crypto market, as well as pretty much anything else. At this point, we are simply building up a bit of a base so that we can continue the overall uptrend.
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