The Ethereum market initially fell towards the 200-day EMA on Monday but then found enough strength to turn around and break above the $2000 level. By doing so, we have gained almost 12% for the trading session, and have held onto the 200-day EMA. The question now is whether or not this momentum can continue, which quite frankly it needs to. If we were to turn around and break down below the 200-day EMA, then it is possible that we could continue to go much lower. That being said, it is interesting that the recovery was so strong, and we have seen quite a bit of support just above the 200-day EMA for multiple sessions, so that is a good sign.
It is very likely that Ethereum will be greatly influenced by Bitcoin, so if it starts to fall apart, you may have to pay close attention to any Ethereum position that you may have. If we do break down below the 200-day EMA right along with Bitcoin breaking down, it would not surprise me at all to see Ethereum reach towards the $1500 level. After that, we could be looking at Ethereum near the $1000 level.
To the upside, the 50-day EMA sits just below the $2500 level, and at this point it is likely that could be the target going forward. If we could break above the $2500 level, then it opens up the possibility of a move towards the $2800 level. This would probably coincide with Bitcoin getting a bit of a boost as well, because fair or not, Bitcoin has an outsized influence on crypto.
We have seen a significant breakdown, so if we were to continue falling from here, is very likely that we would see a massive amount of negative pressure not only in Ethereum, but crypto markets in general. I believe that we are hanging on the precipice, but the Monday candlestick certainly is a huge step in the right direction. With this, I am cautiously optimistic but would build a position, not necessarily jumping with both feet in the market, as it still is under significant pressure and could continue to have major swings and volatility.
