- The Ethereum market rallied quite nicely on Friday to break above the $1700 level. By doing so, it suggests that we may continue to consolidate in the short term.
- That does make a certain amount of sense considering that the market has a lot of different things to think about, and of course, the Friday session was very negative for the US dollar.
- The marketplace will continue to pay close attention to risk appetite because it is the only thing that drives crypto now.
A lot of retail traders are starting to try to bank on “The Merge”, but the reality is that it has already been priced into the market for some time. In fact, it is probably the sole reason that the market bounced from the lows. I still think that the $2000 level above is a major barrier that’s going to be difficult to overcome, so pay close attention to it. If we were to break above the $2000 level, it would be a very strong sign that we are going to go higher.
Rally Likely to Get Sold Into
I think it’s more likely that we pull back from the $2000 level to show signs of exhaustion yet again. After all, this is a market that I think cannot be bullish in an environment where risk appetite is destroyed. While the Ethereum upgrade of course is a bullish thing, the reality is that there are a lot of things to worry about overall, as we continue to see risk appetite get ruined by tight central banks, and of course, the impending recession that we are going to see worldwide.
While many in the crypto sphere will suggest that perhaps crypto should be thought of as being outside the realm of normalcy, the reality is that institutional money has flown into crypto, and therefore it is going to start behaving like a traditional asset. In other words, it’s going to be “risk on-risk off.” At this point, the overreaching attitude is going to be “risk off.” Because of this, I think this rally probably get sold into, so I will be looking for an opportunity to short this market at the first sign of trouble. Underneath, if we break down below the $1400 level, we could go reaching to the $1000 level after that.
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