The Ethereum market has rallied a bit during the trading session on Friday, breaking above the top of the hammer from the previous session. By doing so, the market looks very likely to continue trying to break out, but we have been in a downtrend for some time, and even though we have bounced it is likely that we will see plenty of shorting opportunities given enough time.
If we do break above the top of the candlestick for the Friday session, then we could go looking to reach the $2,250 level, possibly even the $2,500 level. That being said, it is only a matter of time before exhaustion comes back into the market even if we do rally like that, and therefore I think we would be looking to get short at that point. The market is more likely than not going to be a situation where you are going to have to pay close attention to the US dollar as well, which is like a wrecking ball when it comes to other assets, and most specifically on these riskier assets such as crypto.
It is worth noting that we did pull back just a bit from the $2,000 level as well, which is a large, round, psychologically significant figure, and the fact that we could not hang above that level does suggest that we are more than likely going to struggle no matter what happens. When you see the overall attitude of the market, it is easy to see that it would take a Herculean effort to turn everything around. That being said, the most important thing to pay attention to is risk appetite and the greenback. The two go hand-in-hand, and the greenback has been working against crypto as money is flowing into places like bonds instead of more volatile assets such as Ethereum.
If we do break down below the lows of the trading session on Thursday, that likely that Ethereum will really start to sell off, and we could enter a massive drop from there. Short-term rallies are more likely than not going to be the best way to enter this market to the short side, but given enough time, it is possible that we might be in a situation where we can build up a huge position over the longer term.
