If the US dollar spikes over the next couple of days, then it’s likely that Ethereum will be a victim.
- Ethereum has fallen a bit during the trading session on Friday, breaking through the bottom part of a rectangle.
- However, we have not broken completely through, it is also worth pointing out that the 50-Day EMA sits right in the same area.
- Because of this, I think you got a situation where the market more likely than not will continue to see noisy behavior, and of course a bit of support.
Pay Close Attention to the 1700$ Level
That being said, over the weekend we will have to see how Ethereum does, because quite frankly it looks like it’s struggling now. A breakdown below the 50-Day EMA opens up a move down to the $1400 level, and then perhaps even lower, maybe down to the $1300 level. Ethereum typically follows Bitcoin, so pay attention to that market as well. If Bitcoin gives up its bullish run, that will more likely than not continue to show the way for the rest of crypto.
On the top part of the rectangle, we have the $1700 level. The $1700 level is an area that a lot of people have to pay close attention to, as it is a large, round, psychologically significant figure and an area where we should see plenty of resistance. If we were to break above there would obviously be very bullish, but it’s unlikely to be a situation where that happens easily. Keep in mind that Ethereum just went through a massive upgrade, but at the end of the day it’s still dealing with the idea of negativity as far as risk appetite is concerned. Remember, the biggest thing that crypto needs to strengthen is going to be risk appetite as it is pretty far out on the risk appetite spectrum. The volume doesn’t look much different, so will have to wait and see. If the US dollar spikes over the next couple of days, then it’s likely that Ethereum will be a victim.
As long as the Federal Reserve remains extraordinarily tight with his monetary policy, I think we do have issues in crypto, and therefore rallies will be somewhat limited. With this, we could bounce back into the rectangle, but we will have to wait and see whether or not we actually have the momentum to escape it in the near term. I think it’s probably more likely than not going to be choppy until we get some type of impulsive candlestick.
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