Ethereum rallied again during the week ending January 10th, initially reaching up to the $1,350 level before finding resistance and pulling back to under $1,200, eventually closing the weekly candle just above the $1,200 level. This is an inverted hammer despite the green candle, indicating a possible top and trend reversal for Ethereum as Bitcoin appears to be leading crypto lower alongside other markets.
(January 10, 2020 7:30 PM EST)
Outlook: Ethereum nearly scraped its ATH last week before getting rejected, giving back most of the gains to form an inverted hammer as Bitcoin got rejected around the $40K region where it recently doubled its previous ATH. ETH will likely follow suit shortly as altcoins, of which ETH is the foremost altcoin, tend to lag Bitcoin in price action, so it might make sense for ETH to make one last-ditch attempt higher or simply start to turn down in concert with Bitcoin. Ethereum has also gone on a spectacular run since October alongside Bitcoin, tripling in price vs Bitcoin's quadrupling. A phenomenal run no doubt, and I have much confidence ETH will only continue higher in the medium-long term. However, ETH remains relatively low in the ETH/BTC chart, barely budging higher to peak around 0.033 and now back at 0.03 vs its ATH around 0.14 ETH/BTC. By that measure, ETH has a lot of room to grow, even at current levels, let alone if Bitcoin continued its run in 2021-2022 to six-figures. If that's the case, which many models are pointing to, then we just may see a five-figure ETH in the not-so-far future.
In the meantime, I think a pullback is likely, probably taking us back under $1,000 -- possibly for the last time -- to the 38.2% Fibonacci retracement level around $975, 50% at $850, or even 61.8% fib around $750. All of the above are great discounts on ETH for the medium-long term as this may be the last time to get ETH sub-$1,000. The deeper ETH pulls back, the stronger the bounce will be as no one in their right mind would short ETH at lower levels when it's in a clearly defined uptrend and crypto bull markets are notoriously neck-breaking.
I think ETH under $1,000 is great value, so to be able to buy ETH in the three-figures is a great discount - even in the medium term! This would be the perfect time to buy ETH or even find a way earn ETH however possible.
Support: I'm looking for support somewhere between the $750 - $1,000 level. I think there's a good chance ETH will at least spike below $1,000 -- not sure how deep, but that may be best determined by examining the chart above and setting staggered buy orders at different retracement levels.
Resistance: $1,300 and $1,400 are my immediate resistance levels, AKA the ATH, which is an arbitrary number. There aren't a ton of sell orders there, so it shouldn't be particularly resistive compared to Bitcoin's $20K. Once ETH breaks above $1,400, I think it's a quick shot to $1,500 and then $2,000.
