After doubling its value since the start of the holiday season, ETH/USD has produced rough trading conditions the past few days with a spike in selling.
Ethereum has produced turbulent trading conditions the past few days after achieving record high values. A wave of selling has taken place within ETH/USD, and a spike lower from the highs of the 10th of January until the 11th essentially wiped out 25% of the cryptocurrency's value. However, this move lower followed an incredible run higher, which saw ETH/USD more than double its value since the 23rd of December.
ETH/USD has followed in the footsteps of other cryptocurrencies and demonstrated an ability to produce a roller coaster ride for traders who are brave enough to participate within the digital currency markets. Trading the past three weeks has seen a rush of buying, and the recent surge downward may merely be short-term profit-taking by traders and funds who decided now is a good time to cash in some winnings.
The past few weeks of trading are a reminder of the volatile conditions which have been experienced by cryptocurrencies in the past. Speculative highs and devastating lows have been a hallmark of the marketplace since its initiation. However, the past year has seen a rather reliable bullish trend emerge, and one which was able to take place without the frenzied fanfare of previous years. The past few weeks, though, are a stark reminder that ETH/USD is an asset which can be highly speculative and needs to be treated with care by traders.
The rapid price fluctuations of ETH/USD make choosing nearby support and resistance levels difficult, which means traders should enter the market after consideration of their goals and ability to withstand the potential of volatility. Support near the 1005.00 to 995.00 junctures should be monitored closely; if ETH/USD should penetrate the 1000.00 mark lower, it may set off a psychological test of existing sentiment and propel the market lower.
Resistance near the 1125.00 mark should also be watched. If ETH/USD is able to muster more buying and challenge this higher mark, it may wake up buyers who believe that another leg up can be sustained. ETH/USD has proven to be highly speculative the past few weeks, and trading in January has produced rapid fire results. Traders need to be diligent when taking positions of ETH/USD and monitor their positions with finesse.
Ethereum Short-Term Outlook:
- Current Resistance: 1125.00
- Current Support: 1005.00
- High Target: 1205.00
- Low Target: 931.00