Ethereum sold off last week, breaking below the $2,000 level and closing the weekly candle around $1,800. This week hasn't been much better as ETH continues to follow Bitcoin's lead and drift lower. With the 2017/2018 highs in sight, a drop to the low four-figures is not out of the question.
(June 28, 2021 8:30 PM EST)
ETH is still above the 50 and 200 Week EMAs, meaning the long-term uptrend is well in-tact, and dips continue to be buying opportunities. There is still downside potential, however, as ETH remains tethered to BTC which is back under $30K and looks like it's about to revisit the 2017 highs. ETH looks like it's going to hit the 50 Week EMA around $1,587 and maybe the $1,500 level before finding any meaningful level of support. This would be a major buy zone as I anticipate the long-term HODLers will continue to buy and institutions would jump back in after getting burned in a big way in May-June. If support around $1,500 - $1,600 breaks, then ETH could drop to $1,000 where it should find massive support and a huge wave of buyers step in, even if they're buying when their own blood is in the streets.
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Keep in mind the long-awaited EIP-1559 is due to go live in early August, making ETH non-inflationary and possibly deflationary, as well as capping gas fees, and a few other network upgrades. This could be a trigger for a rally as the crypto sees a supply shock similar to Bitcoin's halvings.For a bullish reversal, ETH needs a close above $2,000.
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ETH/BTC found support at the 0.06 level, though it is an ugly-looking chart that looks like it's going to continue lower. ETH/BTC is still a bit overextended given the severity of this bull market correction, so it wouldn't be unusual for ETH/BTC to retrace to the 0.05 level or even 0.04 where there's a confluence of 50 and 200 Week EMAs. This would be a major buy zone.
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