- As I write this article, Ethereum has rallied rather significantly during the trading session on Wednesday.
- In fact, it is roughly a 6% gain that is being seen in the market at the moment, and Ethereum has rallied to recapture the $2000 level.
- This is an area that will be very important from a psychological standpoint, but what I’m more interested in is the fact that the candlestick is bigger than the last several that we’ve seen in this market.
All things being equal, this is a market that I think could offer a lot of value for those who believe in cryptocurrency over the longer term, but you also have to understand that we have a long way to go before things really get bullish.
Technical Analysis
The technical analysis for Ethereum is horrible but I do think that given enough time we will eventually make a run into higher levels. Fright frankly, the market has been sold off so drastically that it does make a certain amount of sense that sooner or later traders will be looking to take advantage of “cheap coins.” That being said, the market is likely to see a lot of volatility, and I think that you have to be cautious about jumping “all in” to take advantage of this move. I would be measured with my position sizing, recognizing that Ethereum still has a long way to go before it becomes overly bullish.
That being said, keep in mind that Ethereum is the backbone for a lot of alternative coins out there, so you will have to pay close attention to how that behaves. There will come a time when this market takes off to the upside, and I do think that we are oversold at the moment, but I also recognize that we could drop another 30% at this point based on history. In other words, this is a market that you should not use leverage in, but if you are an investor, you could make an argument for dipping your toe into the water.