Ethereum fell on Friday, initially dropping below the $1,100 level before turning around and recovering back to around $1,200 where the daily candle settled. This is a bearish candle and to me indicates that sentiment is starting to flip from "buy the dip" to "sell the rally."
(January 8, 2020 8:30 PM EST)
Ethereum fell on Friday to end the week, getting rejected by the $1,300 level and falling to the 23.6% Fibonacci retracement level where it found support, bounced and closed in the middle. This is not a great look going into the weekend especially as Bitcoin similarly struggled today alongside gold which had a significant drop today. Short-term I think we're going lower, probably somewhere in the range of a 30% dip or so which would take ETH to $800-$900. My medium-long term perspective hasn't changed and remains as bullish as ever - we're going higher, and a lot higher. That being said, a dip to under $1,000 is excellent value and a great opportunity to buy ETH on sale before it departs the three-figures forever.
I think the best strategy here is to buy the dips and even earn ETH wherever possible. Otherwise, DCA is the way to go and possibly store some dry powder for another 'larger' dip if we're lucky enough to get one in Q1 2021. I think 2021 will be substantially better for 2021, although ETH has outperformed BTC in 2020 so really it's no surprise there.
ETH is now only a few hundred dollars short of its January 2018 ATH of $1,400, which is a pretty arbitrary ATH and price level. Accordingly, I think it's only a matter of time (not much) before ETH slices through that level and springs up to $2,000 and above.
Support: Look for local support around $1,000, which is untested. Below that, look for support around the 38.2% fib at $918 and my primary support at the 50% fib around $800, which I think will be ironclad support. This is further support by a trend of higher lows, a former resistance level turned support level and the rapidly upturning 50 Day EMA which is nearly at $700 and climbing.
Resistance: Near-term resistance looks to be around $1,300, just under the ATH around $1,400. If we can break above that, then ETH will look toward $1,500 and then $2,000.
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