Ethereum fell on Monday, dropping below the $400 in a wild day, closing around the $390 level. $400 will likely be a highly contested level which will likely be increasingly tenuous as volatility and uncertainty in traditional markets are climbing.
(October 26, 2020 8:00 PM EST)
Outlook: Ethereum fell a bit to start off the week, losing the $400 level but settling just below it. This is short-term bearish. I've mentioned before that $400 is a major inflection point for ETH and will probably not be claimed as support without a fight. That being said, we're making higher highs and higher lows, so I think there's a good chance ETH pulls back to the 50 Day EMA or $350 before finding support, at which point I expect ETH to continue upward and make another run at $400. Climbing volatility in traditional markets will bleed into crypto as well, but will probably not be as bearish for assets like Bitcoin or Ethereum due to the fact they tend to trade more closely with gold, which is not always correlated with equities. However, one thing to keep in mind is the DXY (US Dollar), which has a relationship with BTC. I'm a buyer on dips in ETH, and I think a pullback to the $350 level is excellent value and a buy on the dip. Noone knows how the next few weeks are going to shake out and what kind of effect they'll have on the markets: this much is true. However, once the dust has settled, I think crypto assets like Ethereum are poised for an extremely strong rebound in Q4 into 2021. Regardless of the total amount of a COVID stimulus package or whether taxes and interest rates are higher or lower, the macro environment remains the same, and the best possible investment assets to hold in such as scenario are crypto.
Support: Look for support at the 50 Day EMA around $365 and then $350. As mentioned previously, I need to see an impulsive wave higher above $400 again to be able to call it support. That didn't happen, so ETH pulled back, and now I'm looking for a bounce off support to reattempt $400. Longer-term support should be found around $300 which is only a few bucks higher than the 200 Day EMA, which is nearby.
Resistance: $400 is my inflection point where I perceive ETH in a bull market. Once ETH moves above $400 in a decisive move upwards, then we'll look for confirmation of support and then look higher to $450 and $500. Frankly, once ETH is above $500, I think there's no turning back.
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