The Ethereum markets had a very bullish session on Monday to kick off a huge “W pattern.” Because of this, it looks very likely that Ethereum is ready to go much higher, as the $3500 level almost certainly is an area that will attract a little bit of attention. I do think that we will break through there rather quickly though, so keep in mind that the area is one of psychology more than anything else.
The size of the candlestick is rather strong, and it does suggest that we will have plenty of buying pressure underneath to continue to push this market higher. The 200-day EMA is currently sitting at the $3050 level, and at the bottom of the candlestick for the day. This suggests that the trend has changed completely, and therefore Ethereum is likely to break towards the $4000 level given enough time. That does not mean that it is necessarily going to be easy, but it certainly looks as if it is a real possibility.
Pullbacks at this point should see plenty of buyers because a lot of people will have missed this move. The fear of missing out will be real, and clearly, there were a lot of short-sellers that just got blown out. Because of this, they will be more than willing to get out of the market at either break even or something close to it in order to recover their account. This should cause a bit of “market memory”, and I think a lot of people will be paying close attention to this area.
We recently had the so-called “death cross” form, but now it looks as if we are getting ready to form the “golden cross”, which is a very bullish sign. I do not necessarily think that is something that you should trade based upon, but there is a certain amount of psychology when you see that, and then longer-term investors should continue to be attracted to the market. The market has been rallying for a while, but this breakout, not only in Ethereum but also in Bitcoin, suggests that crypto is about to start going higher yet again overall. The size of the candlestick is a good sign as well, so all things line up to higher pricing in the short term, if not the longer term