Ethereum has been hammered during the early hours on Monday, as it looks like we have filled the gap from last week. The question now is whether or not the $2100 level holds. At this point, it looks as if it probably will, but there are a lot of concerns about the future of cryptocurrency in general. After all, it’s not being used for anything other than trading. While some small economies around the world have a use for Bitcoin, Ethereum, etc., cryptocurrency still looks to be like a solution looking for a problem. Furthermore, longer-term concerns about central-bank digital currencies wiping these things off the face of the earth make them extraordinarily speculative at best.
That being said, it is an instrument that can be traded, and therefore I think people will continue to do so. Whether or not the end game proves strong remains to be seen, but in the meantime, it certainly looks as if there is quite a bit of bullish pressure out there. All things being equal, this is a market that I think does continue to go higher for the meantime, but how much further remains to be seen. I think in the short term, we are probably looking at a move to the $2500 level. However, if we were to turn around and break down below the $1900 level, that could be the end of the overall uptrend. That being said, the market bouncing the way it has during the trading session on Monday does suggest that there are still plenty of buyers.
Keep in mind that the market is likely to continue to see a lot of volatility, and of course we also have a situation where the holidays are coming, and that could take a lot of institutional money out of the market. Furthermore, you have to pay close attention to interest rates in the United States and other developed economies, because if they start to rise again, that will punish crypto. Either way, the market is likely to continue to see overall upward pressure, but the fact that we did so much damage in such a short amount of time suggests that the markets will continue to be noisy.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.