ETH/USD Forecast: Ethereum Continues to Threaten Resistance

It would not take much to spook the market again and send risk assets such as Ethereum tumbling.

  • Ethereum rallied again Monday as traders continue to bet on the upgrade coming down the road as a positive sign.
  • It’s worth noting that we are in the beginning area of a major resistance barrier that starts at the $1800 level and extends all the way to the $2000 level.
  • It should be noted that Ethereum is outperforming most other markets right now, including Bitcoin.

Market Anticipates Successful Merge

Whether or not “The merge” comes through without a hitch is a completely different question, but as things stand right now, it looks like the market is willing to believe that. Whether or not Ethereum is the future is a completely different question as well, but from a technical analysis standpoint, it certainly looks as if market participants are at least trying to make that argument.

Breaking above the $2000 level brings into focus the 200 Day EMA, which is at roughly $2250 and diving lower. I think that will be difficult to get through, and it’s more likely than not that we will eventually get some type of pullback that we can focus on. Currently, it looks like we are in more of a grinding phase than anything else. Remember that there are a lot of concerns out there when it comes to risk appetite, and the CPI numbers coming out of the United States much cooler than anticipated gives a little bit of credence to riskier assets such as crypto going higher.

That being said, we are still in a very tenuous situation with inflation running over three times with the Federal Reserve likes. In other words, it would not take much to spook the market again and send risk assets such as Ethereum tumbling. I’m not necessarily calling for some type of meltdown, just that we still have a lot of downside risks.

On a breakdown, I would anticipate that the 50-day EMA, currently near the $1350 region and curling higher, could offer a little bit of dynamic support. It’s also very possible that we could see the $1500 level offer a bit of support as well. Pay attention to Bitcoin, because if it starts selling off drastically, that will have a bit of a “knock-on effect” over here as well. Granted, Ethereum seems to be leading the way but over the longer-term Bitcoin is still the king.

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.