Ethereum rallied on Monday to start off the week, rallying from the $550 level all the way up to the $600 level before pulling back a hair, closing around $585 at the daily candle's close. This is a bullish candle, of course, and a higher low, but I'm a bit skeptical as this rally started off from a suspicious weekend rally that recovered nearly all of last week's losses. Weekend markets are notorious for being thinly traded in crypto, especially as institutional investors gobble up market share in the space, so low volume rallies have to taken with a grain of salt at least. That being said, if ETH is in fact bouncing off a local higher low, then ETH could be churning up for another retest of the ~$600 resistance level and finally breaking higher.
If that's the case, then we saw a relatively shallow pullback, though not as shallow as BTC, so technically it's kosher. As you can see in the chart above, lately ETH has been bullishly finding support above the 50 Day EMA, not touching it since late October, so this is not out of the ordinary as of late.
However, if this is a weak rally and a bull trap, then I see ETH pulling back to at least the $550 level again but more likely falling to the $500 level before it finds any meaningful support. It's a large, round psychological number and the 50 Day EMA is just below and rising, offering further support. This would make for a clean 23.6% Fibonacci retracement from the recent rally up to ~$630, which I think could set up Ethereum very well for another impulsive wave higher to new local highs.
Ultimately, I think ETH is a better value play from an investor standpoint. I'm a buyer on dips, especially now that ETH's price hasn't moved much despite recent news of crypto index funds, Grayscale ETH Fund seeing ATH inflows, and the Toronto Stock Exchange's QETH.U Ethereum Fund announcing an IPO are huge bullish developments. In the medium-long term, this will likely serve as massive catalysts for significantly higher price movements.
Support: I'm looking for support around the $550 level, then $500, and ultimately $400, which is my line in the sand. The 50 Daily EMA is rapidly approaching $500, and the 200 Day EMA is approaching the $400 level, which should give further support to the long-term uptrend.
Resistance: $600 is immediate resistance until we get an impulsive candle above it and holding it. After that, ETH will look toward $700, $800, and $1,000.
About Me:
If you enjoy these posts, please support the channel by "Tipping" this post below, or using either of these referral links below.
Buy Ethereum here.
Earn Ethereum here
