Ethereum pulled back a bit on Tuesday, pausing its fourth consecutive bullish candle streak. This makes sense as Bitcoin fell on winds of the US Dollar rallying and Gold getting crushed. At this point Ethereum is well within its longer term ascending channel, and after having broken out, it may retest previous resistance as support, or continue on its merry way up.
(October 13, 2020 8:00 PM EST)
Outlook: ETH pulled back a bit on Tuesday, but it doesn't appear to be much of a concern, especially after having broken out over the weekend of a long consolidation pattern. I think we could pull back and retest the 50 Day EMA at $355, which would validate ETH's breakout with previous resistance minted as new support. If ETH gives it back, then I'm not convinced ETH is ready to head higher just yet, but even then, I think ETH's building up some major momentum for a big jump late in 2020 alongside BTC. With ETH 2.0's phase 0 launch weeks away, I suspect this price level will not last long for the smart money who has been accumulating all of 2019-2020.
Support: Ether is currently trading above the 50 and 200 Day EMA's, which should act as support below around ~$355 and 280 respectively. If ETH falls below the 200 Day EMA around $280, the overall uptrend is in jeopardy. At that point my line in the sand would be the $225 level which was a previously very supportive level of consolidation. I gather this is extremely unlikely and only accomplished via the entire network being taken down, or another COVID-related March-caliber sell-off; even then, we see such an event as short-term weakness and an excellent opportunity to add and a medium-long term accumulation zone. Federal Reserve money-printing has shown that price dips on assets will be shallower as their inherent valuation relative to fiat is stronger and perpetually increasing in strength.
Resistance: Ethereum appears to have found resistance above around the $400 level, which was also resistive in Q3 2017, but we all know what happened once it broke above there. Look for resistance levels every $50 - 100, as they're round numbers, especially $500. After that, $600-700 is another key fib level, and the actual market value of ETH based on normalization of the ETH/BTC ratio, which is inevitable.
It's also worth noting that the ETH/BTC ratio as it currently stands is historically low and has quite a bit of room to 'catch up' to BTC's upward price movement YTD, as this ratio also works in cycles and indicates whether Ethereum is undervalued or overvalued relative to Bitcoin. Should ETH 'catch up' to BTC in the ETH/BTC ratio, this would put ETH at roughly $600-700. This is not a matter of if, this is a matter of when. Plan accordingly.
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