Potential signal:
- I would buy a small amount of ETH here, but have a stop loss at 1985, targeting 2400
During the trading session on Tuesday, we have seen the Ethereum market fall rather drastically, but we have also seen the crucial $2000 level offer a bit of support, as it is a large, round, psychologically significant figure, and an area that I think a lot of people will be paying attention to.
The fact that we have bounced as hard as we have does suggest that there is a lot of interest in this market, as it had sold off quite viciously.
Because of this, the market is likely to continue to be very noisy, as the trading public continues to look at the “risk off” situation, they will be very cautious buying cryptocurrency.
All things being equal, the fact that we ended up forming a bit of a hammer is a very bullish sign, and the technical analysis is now starting to shift to a positive tone. This could set up Renée short-term trade, but I don’t viscerally think that Ethereum is going to suddenly take off to the upside and wipe out the short sellers. Rather, I think we have gotten a little overdone, and it’s likely that we will see a bit of a recovery. Whether or not it sticks remains to be seen as well, but I do think there is the real possibility that this thing arises a bit, showing signs of life yet again.
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Support Below
The $2000 level is obviously a major support level, as a lot of people will have been paying close attention to it. With this being said, the market is likely to continue to see a lot of noisy behavior, but I do think that there will be more or less a “buy on the dip” scenario here just waiting to happen, with the market perhaps trying to get back to the $2400 level. The $2400 level is an area that will attract a lot of attention as it had been important previously, and with that being the case I think you have to be very cautious about watching the charts on a daily basis. However, the risk to reward situation definitely seems to favor the upside at the moment.
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