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Ethereum (ETH-USD) gained almost 100% from the lows of the fourth quarter of 2018, but is now retreating since those who bought the lows at the beginning of December 2018 they started to profit. However, this increase is not really an upside reversal, but more a retracement of the long-term downtrend. ETH / USD is still technically in a downtrend and we have to see more of a positive change in fundamentals to allow us to start seeing bullish runs in 2017 and at the start of 2018.
Basic Outlook
The attention of the Ethereum community has shifted to the recent 51% attack on Ethereum Classic, the original Ethereum chain from which the asset and the ETH chain "are hard forged". This has no immediate impact on the ETH price, except for investor confidence in this new technology and the ability of a force to "pick up" the chain through mining power.
Risks such as this, combined with the growing difficulties of the mining sector and the environmental and energy consumption factor, give the Ethereum development team even more reason to continue to focus on ETH owners, instead of miners, to maintain the legitimacy of the Network. .
Technical perspectives
The long-term chart of ETH / USD is shown below:
ETH / USD weekly chart: 10 January 2018
The graph shows the following information:
- The price level of $ 133.96 works as a long-term support. This is the site of the previous lows that were last seen in July 2017.
- Price action fell below this level to the lows of May 2017, before a rebound was recorded at the end of December 2018.
- The price started to fall once again in the wake of some earnings from those who bought the lows of December 2018. With the price now at $ 136.85, a long-term support test is expected to be $ 133. , 96 will take place within the next three days.
To get a clearer picture of the short-term price movement, let's move on to the four-hour chart where a trace of the Fibonacci retracement tool throws more light on what future price action may be.
Chart 4 hours ETH / USD: 10 January 2019
We can see from the graph that the upward correction from December 2018 (ETH / USD is still technically in a long-term downtrend) has hit only 61.8% of the Fibonacci price level, after which the withdrawal is resumed and broke the price of 50% Fibonacci level. The price is now testing the Fibonacci price area of 38.2% to $ 134.78, and the additional price action will depend on whether this area will remain or not.
So with these images in mind, what are the possible price moves for ETH / USD in January 2019?
Commercial scenario
The price is practically based on long-term support, as can be seen on the weekly chart, where the $ 133.96 level is playing this part. The price is therefore expected to test this support area, mainly because this area is also very close to the 38% Fibonacci price level visible on the four-hour chart.
The question that the price candles on both charts must answer is whether they will be strong enough to go below the existing support levels on which they rest or simply test these levels without breaking them below them.
A test of these support areas without a corresponding break will see a price action ranging from 38.2% to Fibo as a short-term plan and a 50% Fibonacci price level that serves as a ceiling in the market. ;interval. This situation could persist for the next few days and will be a good experience for the range merchants.
However, we should also look for a successful break in the long-term support level. If this happens, ie the candle closes below the price level of $ 133.96 with a 3% penetration, then the price will push for the next available support area. In the four-hour chart, the next short-term support is at the Fibonacci price level of 23.6%, which is at the price level of $ 114.34. So this should be a level to keep an eye on following a break from the current level of support seen on both weekly and four-hour charts.
Until there is a press release fundamentally positive for Ethereum over the next three weeks, we do not expect the month of January 2019 to show price movements that will disrupt current highs of $ 168.43. Selling on rallies may be the predominant sentiment in the market this month.
Market sentiment
The long-term, medium-term and short-term prospects of the ETH / USD pair are:
- Long-term: neutral to bearish
- Medium-term: neutral to bearish
- Short-term – bearish
Note: The price moves mentioned above should take a few days for most of the analysis to be performed using short-term charts.
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Revelation: We are / are long ETH-USD. I wrote this article alone, and expresses my opinions. I'm not getting any compensation for this (other than Seeking Alpha). I have no business relationship with any company whose actions are mentioned in this article.
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