Ethereum fell a bit on Monday to kick off the week, initially pulling back to about the $1,250 level before finding some support and recovering much of the gains to finish the daily candle slightly negative with a doji. This is a neutral to maybe slightly bullish candle as ETH continues to consolidate just underneath the $1,400 level and ATHs as it holds onto a very well-defined uptrend of higher lows and higher highs. I know I sound like a broken record but from a technical and fundamental standpoint, ETH looks ready to blow (upward).
(February 1, 2021 8:30 PM EST)
Ethereum's chart looks simply too bullish. Higher highs, higher lows, an ascending channel that's clearly testing a major resistance level -- and breaching it on multiple occasions. Not to mention, following the parabolic end of 2020 rally, ETH completed a ~33% correction from the $1,350 high down to $900. It seems all but certain at this point that that was our correction low unless something radical changes here. With market sentiment volatile but not in opposition of crypto or safe-haven assets like gold, ETH is poised well for a nice run and further support as the anti-Wall Street movement grows and disenchanted individual investors are increasingly awakened to the benefits and tradeoffs of cryptocurrencies and decentralized finance (DeFi) made possible by Ethereum. The herd is coming; you will thank yourself for getting in on it before it got too high.
It's during times like these, when ETH's slow grind sideways and upward that it seems "dead." That couldn't be further from the truth. Ask any professional investor and they will tell you that any tradable asset probably spends 95% (or more) of its time trading sideways in a consolidation pattern. Every asset can't always be in an exciting, parabolic rally (or crash) all of the time. We should be thankful that we get times like these, after a large run-up in a very promising asset that's sure to continue growing exponentially over time, that we get quiet times like these to accumulate more for our personal stacks as we prepare for further breakouts higher that will bode well for our portfolios and balance sheets, depending on what kind of investor you are. Appreciate the quiet; for once the market gets noisy again, you'll kick yourself for not buying more lower when you had plenty of time.
Also consider the ETH/BTC chart below. As you can see ETH is in a clear uptrend and has broken out from its multi-year downtrend on the daily chart. Most notably was the recent breakout above the 0.04 level up to 0.045 where ETH pulled back. Today, ETH dipped underneath the 0.04 level to about 0.385 before quickly finding support and recovering the losses to finish the day slightly positive at just about 0.04 even. As you can see in the after-hours trading, ETH continued its recovery above 0.04, so we'll have to watch this closely. If ETH can sustain the 0.04 ETH/BTC level as support, which it appears to be doing, then ETH will look to move higher, first to 0.05 and then 0.06, which would boost ETH/USD's price to $1,700 and $2,000 respectively.
Simple strategy: Buy the dips and earn ETH however possible. Otherwise, DCA on a weekly/biweekly basis, whatever you can afford. Historical charts and models all point to 2021 being substantially better for crypto and ETH in particular, although ETH has outperformed BTC in 2020 so really it's no surprise there.
Support: $1,200 looks to be immediate support with $1,000 as stronger support.
Resistance: I'm sitting on my hands waiting for an impulsive break above $1,400 which remains immediate resistance but continues to face pressure day after day. This means ETH is gaining strength and looking to break higher very soon. Then, ETH should hit $1,500 and then $2,000. EOY 2021 I think ETH could very reasonably be $3,000 - $5,000, but $7K - $8K is not out of the question once ETH holders lock up their ETH for staking rewards once PoS is live.
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