Ethereum rallied in the week ending August 17th, breaking above the $400 resistance level before settling around the $430 price point on Sunday, August 16th, for a fourth consecutive green candle on the Weekly chart. Ethereum continues to grind higher after vanquishing the February highs around $300 and $350 highs from July 2019. This is, of course, a huge bullish development and positive uptrend, and given the current monetary policy in the US and EU and macro overview, commodities and assets with fixed supplies should continue to do very well over the medium-term. Remember, we are in a new reality with unlimited Federal Reserve Quantitative Easing and inflation, and assets like Ethereum, which have very small levels of inflation (and possible deflation, according to Vitalik Buterin), should see excellent price valuations relative to fiat currencies.
(Aug 17, 2020 7:30 PM EST)
Ether is currently trading well above the 50 and 200 Week EMA's, which should act as major long-term support below around ~$250, which is also the 50% fibonacci retracement level, and locally $400. If ETH falls below the 200 Week EMA around $245, the overall uptrend is in jeopardy. I suspect this is only possible with a significant liquidity event, such as 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.
Looking ahead, this is a buy on the dips scenario, with longer-term investors looking to add on pullbacks, particularly the $400 and, frankly, anything lower. Next immediate resistance is the June 2018 highs around $500. If ETH can break above that, there may be some retail investors from early 2018 looking to get out from under their 3 year holds which have been red up until possibly later this year. Remember, Bitcoin has already climbed back 60% of the way to its previous all-time high; ETH is still down almost 70% from its January 2018 all-time high of $1,400, so there are probably additional sell orders ETH needs to slice through in order to get closer to making new all-time highs. Longer-term, the sky is the limit for ETH, especially if ETH 2.0 and the various phases of network upgrades are implemented, starting in Q4 2020. Fortunately, Ethereum has the greatest mind-share of developers and most active blockchain community, so as Phase 0 launches and the ETH team moves to switch from Proof of Work (PoW) to Proof of Stake (PoS), Sharding, and more, it's only a matter of time until legacy institutions and businesses migrate their data systems onto the Ethereum blockchain, and the demand; thus reward, of owning ETH increases.
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