The Ethereum market has pulled back just a bit during the course of the trading session on Thursday to reach down towards the $3250 level. This is an area that of course will be of interest due to the fact that the 200 day EMA sits just below there. We had recently bounced from just below the 200 day EMA so it looks to me like Ethereum is trying to do everything it can to pick up a little bit of momentum.
The big question of course is whether or not it can take to the upside and try to recover after what has been a rather vicious selloff over the last couple of months. Ultimately, if we can break above the highs of the last couple of days, extensively the 3400 level, then it is likely that we could go looking towards the 50 day EMA at the $3831 level. To the downside, the 200 day EMA which sits right at the $3200 level should offer quite a bit of support but breaking down below there then opens up a retest of the $3000 level.
I think the one thing you can probably count on at this point is that Ethereum is going to be noisy, but that is not a huge surprise considering that crypto is one of the most volatile assets that you can be involved in. I suspect that we are going to see more of the same, as the markets are trying to figure out directionality. Quite frankly, it is probably only a matter of time before we make a bigger move, and I do have high hopes based upon the classic “V pattern” we formed right at the important level. That being said, I also anticipate that this could be a market that is going to be difficult to deal with, so do not get overly levered up right away. I would keep my position size relatively small and then only add as it works out in your favor. I am a longer-term holder of Ethereum, so quite frankly I did not care too much about this pullback and used it to buy a bit more. Whether or not that continues to payoff of course is something that we need to wait to find out, but I have no interest in shorting this market.
