Ethereum (ETH) Risks Further Downside Even Under The Bullish Case 

Ethereum (ETH) Risks Further Downside Even Under The Bullish Case 

With the recent spike in BTC/USD, traders are bullish once again but such moves are of little consequence as it all boils down to what happens in the S&P 500 (SPX) next. The trend line support on the RSI for ETH/USD shows that we might see a decline near-term. If we take a look at the chart, it seems likely as the trend line support would have to be tested at some point. The near-term outlook of ETH/USD remains unchanged as long as the price remains below the strong resistance at $227.83. If the price breaks past it, then we would be looking at it trading further along the wedge and would flip bullish quite aggressively.

Now, it is quite clear that Ethereum (ETH) cannot do any of this on its own. It will have to look up to Bitcoin (BTC) which will in turn have to look up to the stock market. So far, the probability of Ethereum (ETH) rallying past this key resistance to begin a major uptrend remains very low because market conditions are just not ripe for it. It is true that there has been an overreaction to the whole coronavirus situation and we might see some sort of a relief rally in the S&P 500 (SPX) but it is unlikely to be so bullish as to see Ethereum (ETH) rallying to a new yearly high. The most probable scenario at the moment is that ETH/USD will first break below the wedge and decline lower and then begin the next potential uptrend that could possibly see it rise to a new yearly high before halving. 

Ethereum Dominance (ETH.D) is at a turning point. A rejection at the confluence of horizontal resistance and the trend line resistance is already in motion and could see Ethereum dominance (ETH.D) decline aggressively in the days and weeks ahead. So long as it remains above the 200-day moving average, the bulls can hope that it might actually end up breaking the trend line resistance at some point. 

The market is at a point where we could expect major volatility in the near future. This is truer now considering we have Super Tuesday tomorrow the results of which could swing the stock market hard and its effects are going to be felt in other smaller markets like the cryptocurrency market. The next move in the cryptocurrency market is going to shape the direction of the market for a long time. This is why this decision has to be in tandem with the stock market and thus Ethereum (ETH) will continue to trade sideways until the stock market makes the next big move.

Investment Disclaimer
Related Topics: