Ethereum followed Bitcoin's lead in rallying on Wednesday on the back of PayPal's announcement. Ethereum is now at a critical juncture and inflection point that is the $400 level, which has served as major resistance and support since 2017.
(October 21, 2020 8:00 PM EST)
Outlook: Ethereum had its best day in over month Wednesday, gaining nearly $40 in a strong bullish candle up to the $400 level. This was a reaction to PayPal's announcement of allowing users to transact and hold crypto with their platform in 2021, which of course is good for Ethereum as well. This is bullish for the whole space, and we've written about how everything is lining up for another crypto bull run in 2021-2023. I think Ethereum should fare just as well if not better than Bitcoin in terms of percentage gained over the next 3-4 years. I'm a buyer on dips, or even this level, as ETH is still so undervalued against BTC. Keep an eye on the ETH/BTC level, as it's still overextended to the downside in BTC's favor.
Support: Look for support around the $350-360 level which is the 50 Day EMA and a psychological level. Below that, longer-term support should be found around $300 which is only a few bucks higher than the 200 Day EMA, which is rapidly closing the gap.
Resistance: Ethereum is on the attack, clawing at the $400 level again. We've seen this before, and frankly it's way overdue. Ethereum is lagging quite far behind Bitcoin, and some altcoins are faring far worse. That's not to say things are bearish for Ethereum; just the usual BTC-Alt lag. If Ethereum takes out $400, look for it to test that level as support, and then we can look at $450 - $500 which is the top of the ascending channel as drawn in the chart above a round psychological number. Frankly, $400 is my inflection point where I perceive ETH in a bull market. An impulsive and tested move above $500 just punctuates that perspective until proven otherwise.
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