Look at significant pullbacks as an opportunity to build up a larger position for a longer-term trade and a turnaround and start the next bullish market.
Ethereum has no business rallying over the longer term, at least not until other safer assets start to attract attention as well. As long as we have so much in the way of uncertainty when it comes to that risk appetite, Ethereum and other crypto assets are going to continue to struggle. It’s worth noting that we reached the $1800 level, which is the beginning of a significant resistance barrier that extends all the way to the $2000 level. It’s not until we break above all of that that I think the trend itself has changed.
Notice how we had a nice shot higher for a couple of days, and then have done almost nothing. This tells us that the market will continue to be a little hesitant to continue going higher, and the fact that we pulled from the first signs of resistance also suggests to me that Ethereum is just not ready to go higher.
Underneath, the 50 Day EMA will offer a little bit of dynamic support, as it is starting to curl to the upside. The $1200 level underneath is the top of a consolidation area that extends all the way down to at least the $900 level. Ultimately, this is a market that has more likely than not put in some type of bottom, but if we were to break down below that area, then the market could fall apart. I think at this point in time we need to be very cautious about trading this market, but I do look at significant pullbacks as an opportunity to build up a larger position for a longer-term trade and a turnaround and start the next bullish market. Ultimately, every time we pull back there will be plenty of longer-term traders willing to get involved.
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