The Ethereum market did rally initially on Tuesday, chasing the $4800 level. That being said, the market has pulled back a bit during the course of the session, which makes sense considering that we have been straight up in the air for a while. The $4800 level looks to be offering a little bit of psychological resistance, but I do think that it is probably only a matter of time before we see this market break back above that level. A little bit of a pullback would make sense, and as an Ethereum holder myself, I look at this as a potential opportunity if we do drift lower.
The $4500 level would be an area that I think would offer a bit of support from a psychological standpoint, especially as we had seen a bit of a spike in volume there. Even if we were to break down below there, then I would stand up and become very interested if we drop down to the $4000 level. The 50-day EMA is currently at the $3772 level and reaching towards that $4000 level. Any move towards that area has me buying more on the dips.
On the other hand, if we were to break above the top of the candlestick for the trading session on Tuesday, then we will probably make our run towards the $5000 level. At $5000, I would anticipate that there would be a significant amount of this, at least from a psychological standpoint if nothing else. Ultimately, this is a market that should continue to go much higher, as crypto markets in general continue to see a lot of inflow. Ethereum is a little extended at this point, so depending on your time frame, you may wish to be taking a bit of profit at this point, but the market will almost certainly find reasons to go higher over the longer term based upon the massive inflows into the various ecosystems that operate within the Ethereum universe. Longer term, I still have a target of $8000, but that does not mean we will get there soon. Furthermore, the US dollar does have a little bit of an influence if it starts to fall drastically as well.
