Ethereum pulled back a bit on Thursday, initially rallying above $1,650 before pulling back, giving back the gains and closing the daily candle lower around $1,525. This is a bearish-looking candle and looks to me like ETH is going to retest support at the previous bottom around $1,350 - $1,400.
(February 23, 2021 10:30 PM EST)
Short-Term:
ETH will probably put in a major bottom around here between $1,300 - $1,400 if it hasn't already, equating to a roughly 61.8% retracement of this most recent W1 up from ~$1,050 to $2,050. It's possible the low is already in but we'll have to wait and see how the rest of the week plays out. If the buyers step in and ETH appears to stabilize in price, then it's possible the bottom is in. If we continue to see rallies get sold into like yesterday and today, then we may have yet to put in a marginal new low. I'm looking for a W2 termination sometime in the next couple of weeks or so which will set up a possible extended W5 higher to new highs. Once we get a break above $1,800, then we have confirmation the bottom is in.
Long-Term:
As you can see below, ETH is likely in a longer-term W2 correction. ETH has already corrected 38.2% which is enough to conclude the W2, however it is possible for ETH to drift a bit lower. After ETH completes this corrective W2, ETH will be setting up for the start of a W3, which is, of course, notorious for being the longest, most intense impulsive wave that liquidates short positions and goes parabolic. A measured move from here indicates a possible conservative W3 top around $4,500 before any meaningful resistance, assuming only a 1.618 extension. If ETH's longer-term W3 is a 2.618 extension, we'll probably be looking at a $6,000 - $7,000 ETH. Buying now when ETH is 30% on sale is great value for a medium-long term trader/investor.
Fundamentals:
Nothing has changed:
Grayscale bought another 15,000 ETH under $1,600 in the last 24hrs
Ethereum Network on track to settle $1.6 trillion Q1 2021
The top 2 ETH addresses are now smart contracts: 1) Wrapped Ether, and 2) Ethereum 2.0 Deposit
EIP-1559 expected in the near-term horizon which will burn ETH collected by transaction fees and make gas fees predictable
ETH 2.0's Phase 1 set to roll out in late-2021
ETH/BTC:
ETH fell again on Thursday, drifted lower to around 0.0315 on the daily chart. ETH/BTC is now hovering just above the 200 Day EMA which it needs to hold to maintain the uptrend and print a higher low. This also coincides with ETH/USD being at a relatively fair market price and oversold support level, so this might be the point of "maximum financial opportunity." A break above 0.035 and ETH is back in business here. A break above 0.04 and ETH should be looking at a new ATH soon after.
Support:
Local support around the 61.8% fib retracement level at $1,422, then the 50 Day EMA around $1,356.
Resistance:
Immediate-term $2,000, then $2,500, then $3,000.
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