If you are a longer term trader, look at pullbacks as a potential way to start picking up a bit of value.
- The ETH/USD currency pair rallied slightly Friday as we continue to see the Ethereum market recover.
- The Ethereum market is a bit different than other crypto markets, due to the fact that the market is looking at an upgrade later this year, something that has been waited for over the last several years.
- Ultimately, this is a market that I think continues to pay close attention to the outcome of that merge, but at this point in time, it looks as if everything is still on track to get done by the end of fall.
From a technical analysis standpoint, it’s obvious that there is a range of resistance from the $1800 level that extends up to the $2000 level. In this area, I would anticipate that resistance comes into the picture, but it’s worth noting that even though we formed a shooting star for the Thursday session, so far it appears that Friday is willing to look beyond it.
The market is likely to continue seeing a lot of noisy behavior, but if we get a daily close above the $2000 level, it would be a major breach of resistance, and it’s likely that the market would continue to go higher. However, if we take out the Wednesday candlestick, at that point I think we probably have a deeper correction ahead. It certainly looks as if the Ethereum market is resilient, and maybe a bit of an outlier when it comes to crypto, due to the fact that there are network-specific reasons to think that it could strengthen.
Nonetheless, there are a lot of economic headwinds out there, so it’s difficult to imagine that the market will simply take off easily. If we get a major “risk off” type of scenario, that could greatly influence the Ethereum market, making it sell off quickly. Nonetheless, out of all the crypto markets right now, Ethereum is by far the strongest, so I continue to look at it through the prism of the “best case scenario for a bad case market.” Ultimately, this is a market that continues to see noise more than anything else, so if you are a longer term trader, look at pullbacks as a potential way to start picking up a bit of value.
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