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The ETH/USD markets have fallen significantly during the trading session on Friday to lose almost 7% and test the 50-Day EMA. In other words, the rally in Ethereum suddenly finds itself under extreme pressure. This furthermore will confirm the possibility of the risk appetite fading rather quickly, as the stock markets have seen similar moves over the last couple of days.
Ethereum has been rallying quite hard due to the idea of the network upgrade moving forward. Ethereum has led the cryptocurrency markets in general, but at this point in time, I think it’s worth noting that Bitcoin has also fallen rather hard, so it’s all taking a bit of a beating during the day. The fact that Ethereum led the market is probably not a huge surprise, but it’s also worth noting that the $2000 level has been like a hard top in this market.
Will there be explosive moves?
The 50-Day EMA does cause quite a bit of technical support, but at this point, there’s no real reason to think that the markets can bounce just because we’re there. It’s probably worth noting that the 50 Day EMA underneath and the 200 Day EMA above causes a bit of a squeeze as well, so I think we are about to get some type of explosive move. If I had to bet, it would more likely than not end up being a move to the downside. This will be especially true if we start to see a lot of risk appetite disappear in other markets as well.
On the other hand, if we do get a sudden “risk on move” around the world, that could probably help Ethereum as well.
- If Ethereum can break above the $2000 level, that would obviously be a major victory, and it most certainly would be positive if we can break above the 200 Day EMA, sitting right around the $2100 level.
- Any move above there has a lot of technical analysts looking at this as a technical uptrend. We have to assume that the theory would have quite a bit of follow-through at that point.
- I think we have a rather noisy move ahead of us, and more likely than not it’s going to be to the downside. $1200 could be targeted on the move lower, perhaps even all the way down to the $900 level.
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