- Ethereum has been fairly quiet during the trading session here on Tuesday as we hang around the 50 day EMA. The 50 day EMA of course is an indicator that a lot of people will be paying attention to.
- But I think what's even more important is the $4,000 level just below. The $4,000 level is a large round, psychologically significant figure. And of course, it will attract a lot of attention in general. If we turn around and break above the 50 day EMA, then it's likely that the market could go looking at the $4,500 level, possibly even the $4,800 level.
This is a market where traders will continue to look at this longer term uptrend, this consolidation and whether or not risk appetite continues going forward. If risk appetite does pick up, then it makes sense that Ethereum is very important as far as the crypto ecosystem is concerned. And people may look to get into not only Ethereum, but some of the smaller coins. Remember many of the “altcoins” out there actually run on top of Ethereum and its ecosystem.
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Bitcoin Remains the Biggest Influence
However, you do need Bitcoin to rally to make that happen. If we break down below the $4,000 level and Bitcoin is falling, it wouldn't surprise me to see Ethereum drop back to the 200-day EMA. All things being equal though, it still looks like it's got plenty of support, so I'm not ready to start shorting it yet. And I think really all we're doing is looking for a reason to rally from here and get to the top of the overall range. What that reason is at the moment, we do not know, but there will be something sooner or later from what I am seeing around the markets overall.
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