Ethereum rallied a bit on Tuesday, initally falling earlier in the day before turning around and closing the daily candle just under the $1,400 level. The trend is well-defined and the fundamentals are there, is ETH on the verge of breaking out?
(January 26, 2021 7:30 PM EST)
Ethereum is knocking on the door of the upper band of resistance, continuing to print higher lows and higher highs. As you can see in the chart above, ETH has been confined to a fairly wide ~$400 range between $1,000 and ~$1,400 but also appears to be following an ascending channel upward as well. Seeing as how ETH has repeatedly been testing and retesting the $1,400 - $1,450 level five times over the past week, we are very likely to see a bullish resolution higher in short order. When we do, I think a wave of bullishness will be unleashed as stop-buy orders are triggered and an arbitrary resistance level is overcome, providing an open highway to uncharted price discovery up to $2,000 and beyond.
Consider these bullish developments supporting further growth in Ethereum:
- EIP-1559 is anticipated to go live sometime after the Berlin hard fork, which could be relatively soon.
- CME Ethereum Futures launching in February.
- Layer-2 scaling solution ETH 2.0. Phase 0 has been live for over a month. Over $1 billion ETH already staked. Phase 1 (sharding) estimated to launch late 2021
- Proof of Stake will incentivize ETH holders to lock up huge amounts of ETH once Staking is operational, which looks like 2022.
Smart money is and has been accumulating under the previous ATH, which you still have the opportunity to do if you buy tonight. These prices simply will not last, the choice you have to make is: will you buy now before it goes higher, or buy higher later after ETH breaks above $1,500? Personally, I'd rather buy now, have a lower cost basis, and be patient.
Simple strategy: Buy the dips and earn ETH however possible. Otherwise, DCA on a weekly/biweekly basis, whatever you can afford. Historical charts and models all point to 2021 being substantially better for crypto and ETH in particular, although ETH has outperformed BTC in 2020 so really it's no surprise there.
Support: Look for local support at the 38.2% fib around $1,000. Below that, look for support at my primary support at the 50% fib around $850 which is further supported by the rising 50 Day EMA.
Resistance: $1,400 remains immediate resistance until we get an impulsive candle breaking higher, which looks very likely possibly even this week. Then, ETH should hit $1,500 and then $2,000. EOY 2021 I think ETH could very reasonably be $3,000 - $5,000, with $2,000 being my conservative price target.
