- Ethereum rally to bit in the early hours on Tuesday, as we continue to see Ethereum do fairly well.
- Most of the time, I pay close attention to Bitcoin and try to gauge where Ethereum may go, as it does tend to move in the same overall direction.
- However, we’ve seen Bitcoin fail at the $120,000 level again, but it looks like Ethereum can’t be bothered to slow down.
Technical Analysis
The technical analysis for Ethereum is very strong, as we cleared the $4000 level several days ago, with a large positive candlestick that had plenty of volume. In other words, it was a real break out, and I think it does make a certain amount of sense that there are plenty of traders out there willing to chase this trade. However, it’s worth noting that we are not all the way to the all-time high yet, so I think that traders may be trying to push Ethereum back to the $5000 level.
Any pullback at this point in time opens up the possibility of a move down to the $4000 level, which of course is a large, round, psychologically significant figure, and I anticipate that there were probably shorts in that vicinity that would be more than happy to buy their position back if we pull back to that region offering a bit of a support level. Even if we were to break down below there, I think there is plenty of support all the way down to at least the 50 Day EMA, which sits right around the $3400 level. With that being said, the market is likely to continue to see a lot of noise going forward, and that will almost certainly be influence by Bitcoin eventually.
I think it Bitcoin can stay above the $120,000 level, would not surprise me at all to see Ethereum go racing toward the $5000 level, and then eventually breaking above there. On the other hand, if Bitcoin falls apart, then it’s likely that Ethereum will follow the same path.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.