Ethereum rallied a bit on Friday, going back and forth before closing the daily candle slightly positive at around the $650 level. ETH capped off a bullish week posting a $100 gain over five days, breaking out above the $600 and seemingly overcoming it as local resistance. From here, I thnk ETH is well-positioned to continue higher next, targeting the $700 level and higher.
(December 18, 2020 8:30 PM EST)
It's worth noting that ETH's price action remains quite closely tethered to Bitcoin, as is the case for nearly all other cryptos as well. That being said, I think BTC is likely to continue its march higher next week which would support an ETH rally up to $700 as we've been targeting for a few weeks now. You can see in the chart above I kept the lower trendline of the triangle consolidation pattern ETH was in to show the current micro uptrend, which visualizes ETH's higher lows and what would likely be support in the event of a pullback from this level next week. If ETH does pull back, $600 would be our first stop which would be interesting because if ETH bounces from there, we can confirm new support and a higher low. If ETH does retrace back below $600 once again, we should find support around the $550 level which is a nice, round-ish psychological number, a former support level earlier in December, and the 50 Day EMA is not far below and still rising.
Going forward, I think ETH is likely to catch up to BTC a bit, probably rising with the tide up to between the $700 - $800 levels. As of the time of this writing, ETH is still down over 50% from its January 2018 ATH of about $1,420. That just goes to show how underpriced ETH is relative to BTC and how much upside it has going forward. I'm a buyer on dips, and not considering selling or shorting under any circumstance anytime soon.
Support: At this point, I think it's fair to say $600 is tentative support. We got our impulsive candle breaking above $600 and two consecutive bullish days thereafter, so if ETH does pullback, I think a move to $550 or possibly $500 makes a lot of sense. The 50 Daily EMA is rapidly approaching $500, and the 200 Day EMA is approaching the $400 level, which should give further support to the long-term uptrend.
Resistance: Assuming ETH holds $600 as support, ETH's next targets are $700, $800, and $1,000. Then we can start talking about new ATH's, as I doubt there's much resistance between $1,000 and $1,400.
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