Ethereum rallied on Monday to kick off the week, swinging wildly in both directions, down as low as nearly $1,400 and as high as $1,950 to form a new ATH before pulling back, settling the daily candle around the $1,750 level. This is a volatile albeit bullish candle as ETH experiences quite a bit of turbulence as Bitcoin rallies hard and reasserts its market dominance in the crypto space.
(February 8, 2021 8:30 PM EST)
Ethereum continued higher in a slightly more erratic fashion than its other large-cap companion, reaching lower and higher before ultimately closing the trading session moderately in the green. This affirms a few things for us:
ETH put in a higher low
$1,500 is support
Uptrend is intact
As long as this uptrend remains valid, which it is, ETH should continue grinding higher, even if less decisively while in Bitcoin's shadow. For now, I think ETH will be grinding up towards $2,000, its initial price target, followed by $2,500 and then $3,000. ETH often moves in tandem with Bitcoin and is now a clear-cut large-cap in crypto, barely meeting the criteria for an 'altcoin' anymore -- it's simply made too much separation from other projects. Frankly, it's not even much of a competitor to BTC - they serve very different functions, so speculation about a possible "flippening" is conjecture at best; though not impossible. We'll get a better idea of how powerful ETH really can be once ETH 2.0 rolls out. Remember, during periods of impulsive Bitcoin rallies that blow your hair back, alts typically tend to have muted responses or even bleed in satoshis. This could be the case for ETH which retains its USD value but drops in ETH/BTC ratio, as you can see in the chart below.
ETH/BTC broke below the 0.04 level today, dropping like a rock with a large bearish candle to about the 0.038 level and closing the daily candle at the lows. This is not a good look for the ETH/BTC ratio, though it's to be expected in light of Bitcoin market dominance which dominates crypto bull markets as a whole. However, if ETH/BTC can find support and print a higher low, particularly around the 0.035 level near the 50 Day EMA, this would still be bullish as a higher low and a healthy correction finding support at the upper moving average, allowing for a reset for ETH and a rebuilding of momentum for ETH's next leg higher against BTC.
In the meantime, we continue to HODL, 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. ETH returned over 400% in 2020, and if the models suggest ETH (and crypto in general) to outperform in 2021, then we can possibly expect a greater than 400% return in 2021, pointing to a high of somewhere between $3,000 - $4,000. It's worth noting that YTD, ETH is currently up 125% from its Jan. 1 price of $750.
Support: This has been all but confirmed; look for support around the $1,500 resistance region, which has been tested a couple of times since we broke higher and appears to offer buying pressure.
Resistance: All eyes are now on $2,000, then $2,500. The former would be a clean resistance level, though crypto is rarely clean so we could see a stronger momentum push up to $2,500 or possibly even $3,000.
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