Ethereum sold off on Thursday alongside Bitcoin, falling from the $1,400 level down to under $1,200 in a nearly 20% red day. This is a bearish candle for sure and validates our view that crypto has not yet completed a standard 30%+ correction typical in bull markets. There will be more pain ahead, yet we will be buying while there's blood in the streets.
(January 21, 2021 8:30 PM EST)
Ethereum sold off on Thursday, dropping like a rock as ETH gets rejected off the ATH level again as it appears to be drifting back toward $1,000. That should be a major inflection point; if ETH holds there, then we have new support and a higher high, which is much more bullish for ETH going forward. If ETH breaks below $1,000, then I see strong support around the 61.8% Fibonacci retracement level around $850 which is being supported by the 50 Day EMA.
Once ETH breaks above $1,450, it's off to the races as everyone will pile in as ETH looks to climb the wall of four-figures towards $10,000 and higher. There's no doubt that ETH is going higher in the medium-longer term, it's just a matter of buying near the ATH or waiting for a pullback (like this one). For anyone 'brave' enough to buy now or even wait a few days to buy lower, they will be rewarded. Anyone too scared to buy when there's blood in the streets will likely FOMO in later after ETH breaks above $1,500 and will pay a premium of $400+ per ETH for buying during a sustained short-term uptrend. Why not buy more ETH at a lower cost basis earlier to start the countdown for long-term cap gains? Smart money has been buying since early 2019 and will continue to accumulate during this pullback. Will you?
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. Then, ETH should look toward $1,500 and then $2,000. "Longer"-term, I think a $5,000 - $10,000 ETH by 2022-23 is not only realistic but likely given crypto's adoption, ETH 2.0's launch, and the fiat currencies' rampant inflation.
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