Ethereum fell hard last week, dropping about 30% from above the $2,000 level to under $1,400 level, giving back most of the last 3 weeks' worth of gains. This is obviously a bearish candle as ETH pulled back significantly, however finding support at the previous ATH/resistance level of $1,400 indicates that ETH may be reverting to the mean and testing support at a higher low before resuming to higher highs.
(February 28, 2020 8:30 PM EST)
Short-Term:
Ethereum continued to fall over the weekend down to a hair under the $1,300 level before finding a bit of support, recovering slightly to just north of $1,400 to end the week right at the previous high/resistance level. It appears the former ATH's/major resistance at $1,400 is now acting as support, as these levels tend to do during uptrends. If ETH can hang on here at $1,400 which is roughly the 61.8% Fibonacci retracement and the 50 Week EMA on the ETH/BTC chart, then ETH can gain its footing and start to recover a bit higher.
Long-Term:
ETH is currently finding support at a confluence of supportive levels: 61.8% retracement, previous major resistance level (now support), and 50 Week EMA on ETH/BTC chart. This is a classic crypto ~30% bull market correction in which ETH is reverting to the mean and testing support, printing a higher low. This is good and frankly healthy for ETH as we want this bull market to be sustainable and consistently rise over time. Bull markets are not linear lines that go straight up to the cycle peak; there are peaks and valleys, and this is a valley. With that being said, I'm a buyer on this dip as we are in a bull market and this dip is a fantastic value add at 30% off the current ATHs. ETH is projected to outperform its 2020 performance, which was ~450%. Accordingly, this equals a $3,000+ ETH by EOY 2021, and if you look at my longer-term chart from last week's ETH article, you'll see my projected W3 extends above $5K (again - not the cycle top).
ETH/BTC:
In the ETH/BTC chart below, you can see ETH has been bleeding in satoshis, falling to the 0.031 level where ETH/BTC found support at the 50 Week EMA. This is major support and needs to hold less ETH falls further. After the gravity of this correction and the ever-present bullish fundamentals and technicals, it seems that we may be approaching a local bottom/higher low, indicating a low-risk level to add to longs before reversing back higher. If ETH can find support at the 61.8% fib around 0.031 or the 50 Week EMA slightly lower, and bounce from there, we'll look for ETH to break above 0.04 and resume the uptrend to higher highs in satoshis.
Historically, the ETH/BTC ratio trades between the 0.04 and 0.08 level, and typically peaks during bull markets north of 0.10 ETH/BTC, so as you can see based on this ratio, ETH is quite low historically in this respect, even below 0.04 again. As far as price targets go, 0.04 and more importantly 0.05 are our immediate price targets.
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:
$1,400, then $1,300, then 78.6% fib at $1,259.
Resistance:
2,000, then $2,500, then $3,000.
