Ethereum rallied during the week ending November 29th, reaching above the $600 level before turning around, dipping below $500 before settling just above. Ethereum formed an inverted hammer with a long wick on the upside, indicating a steep rise and drop, probably a blowoff top on the weekly chart, yet still closing the week slightly in the green.
(November 29, 2020 9:30 PM EST) Outlook: Ethereum rallied hard and fell nearly just as hard last week, breaking above the $600 level and giving back nearly all of the gains late into the week as Crypto assets sold off into the long US holiday weekend. There has been some recovery in Crypto over the thinly-traded holiday weekend session, but the real price discovery will show during this week, as we approach both a seasonal liquidity drought in legacy markets and the famed ‘Santa claus rally’ into year’s end, not to mention ETH 2.0’s beacon chain being launched on December 1st after more than exceeding the required number of ETH staked. As institutions drive this current crypto rally with marquee names like Paul Tudor Jones, Bill Miller, Stan Druckenmiller, PayPal, Square, and more by the day it seems, Bitcoin is almost reaching a level where retail investors are priced out, requiring multi-five figures to acquire one whole asset. I think this bodes well for ETH, as it is the second-largest cap in Crypto, yet costs less than one-twentieth that of Bitcoin and is perhaps the project with the highest ceiling as a utility token and network. As Bitcoin reaches new ATHs and acquiring one whole unit becomes less and less possible for most retail investors, ETH should the be the logical next choice. Now, that’s not to say ETH shouldn’t or isn’t of interest to institutions and traditional investors, because it is, just on a smaller scale. Traditional finance moves slow, and it wasn’t until earlier this year that they really started to catch onto Bitcoin, when there’s a whole other galaxy of thousands of other Crypto assets to explore. As ETH 2.0 continues to roll out in 2021-2023, I think we see ETH easily reach the four figures as it catches up to Bitcoin a bit, which is gobbling market dominance in crypto right now. Support: 38.2% at $503, which we have already tagged (and breached briefly) although recovered nicely into Asia trading. I think more likely we’ll see a further pullback to either get 50% fib at $467, the 61.8% fib at $430, or somewhere in between. $400 should be firm long-term support now, and maintaining price above it historically has supported higher prices. Resistance: $600 is immediate resistance, and I need an impulsive candle above it and holding it to prove a sustained rally. After that, $700, $800, and $1,000. After $1,000, ETH will probably start to trade similar to Bitcoin a few years ago where it starts moving in larger increments as investors inflows dwarf the market cap, causing rapid price discovery and causing euphoric jumps in price.
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