- The Ethereum markets bounced a bit during the trading session on Tuesday, as the 200-Day EMA has offered a bit of support.
- At this point, it makes a certain amount of sense that we might see a little bit of recovery, and that of course we have the economic numbers in the United States coming out weaker than anticipated.
- After all, the JOLTS Jobs Openings number in the United States came out 1 million job openings less than anticipated. Furthermore, the Consumer Confidence numbers dropped. What’s this got to do with crypto you say? It comes down to monetary policy and interest rates.
The idea is that if the US economy is slowing down, the Federal Reserve will have to loosen its monetary policy, or at the very least stop tightening so rapidly. That gives a certain amount of weakness in hand to the US dollar, and of course, Ethereum is priced in that currency.
Traders Have Been Consolidating for a While
Beyond that, there’s also the concern that market participants may have to pay close attention to whether risk appetite returns to the market. After all, it does take a certain amount of risk appetite to go into crypto to begin with, especially after it got sold off so viciously over the last couple of years. However, you can also make an argument that traders have been consolidating for a while, so it’s possible that there has been a bit of an accumulation phase.
The 50-Day EMA sets just above, and it will of course offer a little bit of technical resistance. That being said, if we can break above the $2000 level, then I think Ethereum really starts to take off to the upside. In that scenario, it’s possible that Ethereum could reach all the way to the $3200 level, which of course is a large, round, psychologically significant figure. On the other hand, if we were to turn around and break down below the 200-day EMA, and by extension the lows over the weekend, then we could drop down to the $ 1,500 level, followed by the $1250 level after that. All things being equal, this is a situation where it looks like we are at the very least able, so if you are a true believer in Ethereum, this might be a decent area to get long.
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