I don’t think this is a scenario where you can take rallies very seriously.
Ethereum pulled back just a bit on Tuesday as we continue to see a lot of negativity out there. Ultimately, this is a market that I think given enough time will drop. The $1900 level offers a little bit of support, but the $2000 level is quite a bit more impressive. We have been falling for a while, and the fact that we have continued to build a bit of a descending triangle suggests that we are going much lower. The $1800 level is the next target.
Rallies at this point in time will be selling opportunities, and I just don’t see an opportunity to try and ride a move to the upside. Even if we were to rally, there is a significant barrier at $2100, followed by $2200. After that, you have to worry about the 50-day EMA which is at the psychologically and structurally important $2500 level. Ultimately, I believe that we will eventually find sellers and that at the first sign of exhaustion people will run away.
Crypto is a disaster at the moment, and there’s no reason to be looking to buy it. Even if it does stabilize a bit, you should have plenty of time to get involved and build up a bigger position. After all, trend changes take a while, they don’t happen out of the blue. Tightening central-bank policy has put a lot of upward pressure on the US dollar, as traders around the world are worried about risk appetite suddenly being wiped out. The crypto markets of course are rather far out on the risk spectrum, so you need a huge “risk-on market” for crypto to rally. Even Bitcoin has struggled, so I don’t think this is a scenario where you can take rallies very seriously.
There is a lot of chatter around when the upgrade on the Ethereum network gets finalized, but at this point in time that is almost like a running joke. Every time the developer says that there is a certain timeline, it gets pushed back. It’s as if the market is starting to run out of patience, in an environment that’s not going to be conducive for higher crypto prices to begin with. I fully anticipate that this market breaks down and goes looking to reach the $1600 level over the course of the next several weeks.