Ethereum rallied on Monday, breaking higher to put in another marginal new ATH in fiat terms before pulling back to close the daily candle around $1,350. For the past two weeks, ETH appears to have detached from Bitcoin, at least temporarily, as it forms a bullish ascending channel which looks like it's about to burst higher.
(January 25, 2021 8:30 PM EST)
Ethereum is printing a classic bullish sideways consolidation pattern with a defined channel, uptrend, and series of higher lows and higher highs. We could even see a breakout as early as tonight (Asia morning). With ETH having just reached higher to briefly breach resistance and graze another marginal ATH, ETH is building up massive amounts of momentum as it knocks on the door of the resistive $1,400 region. Finally, it appears ETH is ready for one final and successful attempt to conquer this resistance level. We shall know soon enough, but the technicals are indicating a further upward move from here.
Couple that with the range of bullish news and developments surrounding Ethereum:
- EIP-1559 is anticipated to go live sometime after the Berlin hard fork, which could be relatively soon.
- CME Ethereum Futures product is set to go live in February (which I think could be more bullish than Bitcoin's CME futures launch because we're now in a much more rapidly maturing market being rapidly adopted by institutional investors, banks, university endowments, hedge funds, and more. When BTC futures went live, BTC was a much younger and less developed asset and market on a parabolic retail-driven bull run. This time, ETH is trading at a small discount of its ATH and is picking up steam as it continues to develop and roll out...
- Layer-2 scaling solution ETH 2.0. Phase 0 has been live for over a month. Over $1 billion ETH already staked. Phase 1 (sharding estimated to launch late 2021)
- Proof of Staking will lock up huge amounts of ETH once it's live, which is looking like in the next couple years
ETH is going higher in the medium-longer term, it's just a matter of buying near the ATH or waiting for a pullback (like this one). For anyone 'brave' enough to buy now or even wait a few days to buy lower, they will be rewarded. Anyone too scared to buy when there's blood in the streets will likely FOMO in later after ETH breaks above $1,500 and will pay a premium of $400+ per ETH for buying during a sustained short-term uptrend. Why not buy more ETH at a lower cost basis earlier to start the countdown for long-term cap gains? The smart money has been buying since early 2019 and will continue to accumulate during this pullback. Will you?
Simple strategy: Buy the dips and earn ETH however possible. Otherwise, DCA on a weekly/biweekly basis, whatever you can afford. Historical charts and models all point to 2021 being substantially better for crypto and ETH in particular, although ETH has outperformed BTC in 2020 so really it's no surprise there.
Support: Look for local support at the 38.2% fib around $1,000. Below that, look for support at my primary support at the 50% fib around $850 which is further supported by the rising 50 Day EMA.
Resistance: $1,400 remains immediate resistance until we get an impulsive candle breaking higher, which looks very likely possibly even this week. Then, ETH should hit $1,500 and then $2,000. "Longer"-term, I think a $5,000 - $10,000 ETH by 2022-23 is not only realistic but likely given crypto's adoption, ETH 2.0's launch, and the fiat currencies' rampant inflation.
