Ethereum fell hard to start off the week, resolving the tightening triangle pattern to the downside and dropping under the $1,700 level, and Tuesday more of the same weakness. This is a bearish development and is contrary to what the pattern suggested and what we were expecting, so now we are watching for signs of support and another higher low before bouncing higher.
(March 23, 2020 8:30 PM EST)
Short-Term:
Ethereum's break lower out of the ascending triangle pattern indicates ETH is still consolidating and is most likely in a simply larger triangle pattern that will take some time before that resolves, probably later this Spring. If this is the case and we see sideways trading for the next few weeks, then this could bode well in the medium-term as longer consolidation patterns typically lead to longer or more powerful bullish breakouts, which would align well with the historical crypto seasonality which is typically very bullish April - June. We could be seeing the calm before the storm right now.
In the meantime, the near-term support target would be the rising 50 Day EMA around $1,550, a historically strong support level for identifying the bottom of corrective pullbacks during bull markets. We're still very much in a bull market and dips are buying opportunities, especially with ETH now ~15% off the current ATH, so dollar-cost averaging continues to be an effective recurring medium-long-term investment strategy.
ETH/BTC:
ETH continues to struggle against BTC as it continues to drift lower below the 200 Day EMA around 0.031, settling the Tuesday candle around 0.035.
All eyes will be on 0.03 as the final support level before a precipitous fall to the next support region around 0.025, a bearish fall from grace in satoshis. This is not bearish in terms of ETH/USD as ETH can double or triple in USD price but maintain the same BTC ratio if BTC goes parabolic, as we have been expecting for Spring-Summer 2021. Like previous cycles, typically Bitcoin leads all of crypto and alts 'catch up' later, of which ETH would lead the altcoin pack. Typically, ETH doesn't peak in BTC or USD values until 2-4 weeks after Bitcoin puts in a market cycle top, giving us assurance that ETH is still relatively early in this bull market phase and that sub-$1,800 is excellent medium-long term value.
If ETH/BTC peaks around 0.1 or higher as it historically has done in previous crypto bull cycles, ETH is set up for a conservative 300%+ price appreciation from current levels ($5,400+).
From my perspective, all signs indicate it's probably wise to buy ETH or earn ETH now before prices continue to ascend in dramatic throughout the rest of 2021 and further. Buying ETH under $2,000 is like buying Bitcoin under $30K; not much higher than the previous ATH, and not likely to last much longer.
Support:
$1,600, then 50 Day EMA around $1,550, then $1,500, then floor at $1,400.
Resistance:
$2,000, then $2,500, then $3,000. Pay more attention to the ETH/BTC ratio for resistance levels.
