In the short term, I think crypto markets in general are going to be toxic.
Ethereum has broken major support in the form of the $30,000 level, as Bitcoin got crushed as well. This is a market that looks like it is going to go much lower, perhaps reaching towards the $2500 level rather quickly. Unless Bitcoin gets it act together, Ethereum has absolutely no real chance of taking off to the upside. We have shown the 200 day EMA to be wanting, and I think we will continue to go much lower.
As you know, I am a longer-term investor in Ethereum, so I am simply sitting on the sidelines in order to pick up a ton of Ethereum. The year 2022 should be very good for Ethereum, due to the rollout of “Ethereum 2.0” later this year. With lower gas fees and more throughput, that will make the Ethereum blockchain much more attractive. There are already a ton of projects on the Ethereum blockchain, but right now the market is not trading based upon anything to do with Ethereum itself.
This is a purely “risk off trade” that we see around the world. It is not just Ethereum that is getting crushed, it is multiple other assets. It is not only Bitcoin that is getting crushed, but also pretty much everything that is considered to be attached to the idea of “growth.” The NASDAQ has been absolutely crushed, right along with other risky assets, so it does make sense that Ethereum is doing the same thing. This is a market that has shown that it is about to give up a lot of gains, and I think we are threatening the idea of entering a “crypto winter.” If that is the case, it will be interesting to see what the actual use case scenario of Ethereum does for price.
Pay attention to the Bitcoin market, because it certainly has its influence on what happens over here, as Bitcoin leads the markets. If Bitcoin could recover the $40,000 level, that might be the green light for Ethereum to start bouncing again. I do not necessarily expect that to happen right away, but eventually we should see an attempt to make it happen. In the short term, I think crypto markets in general are going to be toxic.