We could see quite a bit of more downward pressure in this market, right along with the rest of the crypto world.
- The Ethereum market fell a bit Tuesday as we continue to see a lot of negativity.
- We had recently broken out of a sideways rectangle.
- Now it looks like we are getting relatively close to retesting that previous resistance as a potential support level.
Watching the 50-Day EMA
It is worth noting that the 50-Day EMA is sitting just below, right at the top of the previous consolidation area. The 50 Day EMA is an area that will attract a lot of attention, as most traders will look at it as a shorter-term indicator. That being said, it’s also worth noting that Ethereum is in its own world at the moment, as we are starting to try to price in “The Merge” that is supposedly going to happen in September. That being said, the market is likely to see quite a bit of confusion, and is very possible that we could be disappointed yet again by the Ethereum ecosystem.
If we were to break down below the 50-day EMA, it’s likely that we will reach the $900 level. That’s where things get interesting, because if we can break down below that level, then I believe that Ethereum will start to fall off quite drastically, perhaps plunging to reach the $500 region. Somewhere between $500 and the $400 level below is where I anticipate the longer-term sideways action to happen in a prolonged “crypto market.”
On the upside, the $1600 level is an area where we could see a lot of resistance. Breaking above that opens up the possibility of a move to the $1800 level. It’s worth noting that the Wednesday session is going to be important as the Federal Reserve is going to have a monetary policy statement. Keep in mind that the market is going to focus on whether or not the monetary policy is going to remain, and if so it’s likely that we could see quite a bit of more downward pressure in this market, right along with the rest of the crypto world. However, if the statement after the Federal Reserve meeting is thought of as showing the first cracks in the ice when it comes to tightening monetary policy, that could have crypto turning around, and Ethereum should fall right into that category.
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