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I look at this more or less as an opportunity to short Ethereum if I get a reasonable setup.
The Ethereum market has gone back and forth as the $1600 level has offered a significant amount of resistance. If we can break above there, then it’s likely that we could go to the $1800 level, where we have a lot of supply. Ethereum got a bit of a bounce based upon “The Merge” coming in September, but quite frankly we have seen that story before. It’s very likely that we see a situation where the market is very possibly going to see a bit of disappointment down the road. After all, the update to Ethereum is moving at a snail’s pace.
Looking at the chart, you can see that the $1800 level is a major resistance barrier, so even if we do continue to rally from here, I would anticipate that’s about as high as we can go. Because of this, I will be paying very close attention to the $1800 level if we get any signs of exhaustion whatsoever. At that point, I will not hesitate to start shorting the market, as I believe there is a significant amount of resistance all the way to the $2000 handle.
Alternately, if we start falling from here the $1400 level will more likely than not end up being a potential support level, especially as the 50-Day EMA sits just below it. Because of this, I think we have a scenario where the market could find itself trying to break back down into that previous consolidation box marked on the chart. Even though there is a lot of hype around “The Merge”, the reality is that it is not going to happen until at least September, so while the market tries to front run that scenario, there are a lot of other economic headwinds out there that will continue to put pressure on crypto in general. Because of this, I look at this more or less as an opportunity to short Ethereum if I get a reasonable setup. Longer-term, I still like Ethereum a lot but I would like to see more convincing price action to start buying it. I would love to see it burst through the $1000 level to the downside, but we have to trade the market that we are shown, not the market that we want. Right now, I think we are getting a little ahead of ourselves.
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