Ethereum initially pulled back a bit on Thursday, but bounced and finished the day slightly green, settling around $380. If this is any indication of buyers taking advantage of dips, then Ethereum might be ready to overcome the $400 level.
(October 15, 2020 8:00 PM EST)
Outlook: ETH rallied a bit on Thursday, forming a bit of a hammer. What this tells me is people are buying the dip on ETH; at least in a small way. This is encouraging, but not convincing of anything just yet. We need to see follow-through here, and breaking above yesterday's high is a good start. BTC had a more bullish day in comparison, so if ETH can follow the king's lead, which it often does, ETH could be in a good position. Looking at the chart, I see a series of higher highs, and even if ETH pulls back here, as long as it finds support at the 50 Day EMA around ~$350, that would print another higher low, setting the stage for another leg up. Longer-term, I like ETH more than BTC in terms of potential percentage gain. It's still 70% down from its 2018 All-Time High, and if ETH 2.0 is supposed to launch its initial phases before the end of 2020, there could be a huge tailwind going into 2021-2022. It's also a lower market cap than Bitcoin, so inherently easier for it make exponential gains versus Bitcoin which is already over $11,000. Sometimes, #2 doesn't do so bad after all.
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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