Outlook: Ethereum rallied a bit on Thursday, initially pulling back a bit before breaking back above the $600 level, closing the daily candle near the highs around $615. This is bullish as ETH is approaching the local/yearly high around $625. Frankly, ETH is in a technically more bullish position than Bitcoin, as it is simply in the earlier stages of a larger impulsive rally. Though Ethereum somewhat tracks Bitcoin, it gets left in the dust, relatively, compared to Bitcoin, which has gone straight up since early October with little to no downside. Though Ethereum experienced excellent returns since in traditional standards, the ETH/BTC ratio is still quite extended in BTC's favor. That leaves ETH, which seems to be trying to break out from a corrective pattern, to higher highs. If there is a short-term rotation out of BTC into ETH, I think this will provide the juice ETH needs to break out further from here and up to the $700 or $800 level. I still think it'll be a while before ETH hits its ATH, of which ETH is currently more than 50% down from vs Bitcoin which is within spitting distance to its (marginal) new ATH just formed.
That being said, if ETH pulls back from here, I think a pullback to $500 makes sense as its a large, round psychological number, former resistance, and aligned with the 38.2% Fibonacci retracement level. Below $500, I'd look for support around $450, which was the upper band of a previous trading range and is close to the 50 Day EMA now at $466. I would be all over ETH at those levels, as that sort of value is getting a little tougher to get now as prices are rising with the tide of institutional money, multinational companies, limited supply, and layer-2 scaling solutions coming to fruition after years of development.
(December 3, 2020 8:30PM EST)
Similar to Bitcoin, I think the ETH chart could be pretty boring for the next few months, as there are no known significant catalysts as we wait for sharding and staking to take shape. That being said, I think we could see some sideways trading over the next few months as ETH digests the recent gains and consolidations a bit, which would provide an extended accumulation zone for what I portend to be an increasingly bullish 2021-2023 period.
Support: Look for support at $500, which is former resistance and a large, round psychological number, and a level of support as ETH just bounced off it following a nasty holiday weekend selloff. $500 should be pretty strong support, but below that I'll look for value underneath around $450 which is near the 50 Day EMA and ultimately $400, which should be ironclad support.
Resistance: $600 is under duress as ETH has closed above it by some margin, though I'd love to see continuation here to prove a penetration of $600 - a fall back to grace from here would indicate $600 still holds as resistance. If ETH can print an impulsive candle breaking above $600, then eyes will turn to $700, $800, then $1,000. I don't forsee any major bullish catalysts in the near-term, so I think $600 is our number to watch for now, then $700.
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