Ethereum exploded higher on Monday, starting off the week on an extraordinarily bullish note as ETH crested the $700 level, reaching up the $750 level before pulling back a bit, closing the daily candle around $725. This is a classic bullish engulfing candle igniting a bullish breakout upwards for ETH has it officially has marked a 50% retracement of the January 2018 highs of ~$1,400. From here, ETH is likely to head higher.
(December 28, 2020 8:30 PM EST)
ETH broke higher on Monday, exploding above the $700 level to pierce the all-important ATH 50% retracement level, a large round psychological number, and printing a new local high. ETH is now at its highest level since late 2018, clearly indicating a strong uptrend and commencement of a bull market. Things appear to be just getting going with ETH as alts tend to lag BTC as it sucks up market dominance early-mid crypto bull markets. Fortunately, ETH is the immediate benefactor once BTC stalls or any capital rotates out of BTC.
In the immediate term, look for ETH to test the $750 level and then $800, which should happen as early as this week. After that, ETH will look to $1,000 as the resistance between $800 and $1,000 shouldn't be much. As you can see in the chart above, ETH breaking above $700 is a break above the upper trendline of this ascending channel, meaning that ETH could face resistance suppressing it back within the channel's borders.
I'm a buyer on dips. Ultimately, I think DCA is the way to go and to store some dry powder for another 'larger' dip if we're lucky enough to get one in Q1 2021. I think the bullish exuberance has peaked during December, so a period of consolidation would not be unwarranted for some time until the next macro leg higher across the crypto board.
Support: If ETH does pullback, look for a retracement back to the $650 and then $600 levels. ETH has continued to print a series of higher highs and higher lows, so at this point I'm not sure ETH even gets back to $500 at this point. The 50 Day EMA is probably the deepest retracement ETH sees around $550. More likely, I think $600 would be a logical higher low and a ~20% pullback from today's close, which I think is more than sufficient as ETH looks up.
Resistance: ETH has closed above $700 which is a good sign, so now we need continuation. A pullback to $700 and then a bounce is validation, or an impulsive candle up higher towards $800 is also a positive sign. Assuming ETH holds $700, the next target is $750, then $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.
About Me:
If you enjoy these posts, please support the channel by "Tipping" this post below, or using either of these referral links below.
