Ethereum fell rather drastically during the session on Tuesday, as the US dollar continues to strengthen after larger than anticipated gains in the retail sector.
Because of this, the currency headwinds in front of Ethereum continue to be an issue. That we have broken below the $280 level, it looks very likely that we will continue to sell off. Regardless, I would be very hesitant to get into this market until we can have at least 24 hours of stability.
Currently, it looks as if we are going to go looking towards the $265 level, and a breakdown below there will almost certainly send this market to the $250 level which of course has a certain amount of psychological importance.
Selling rallies on exhaustion
I think at this point, it’s obvious that the US dollar is starting to become favored again, and this is starting to look like the wipeout that we had a couple of weeks ago. As I record this, we are down almost 8% from the open of the day.
Recently, it seems as if the moves lower have been much more volatile and much more stringent than the moves to the upside. This tells me that there is a significant amount of interest in selling, and I believe that Ethereum may have a couple of rough days ahead of it. As far as buying based upon value goes, while I do believe in that longer-term, I don’t see any type of setup currently that suggests we should be looking at this pair.
The biggest mistake most crypto currency traders make is they don’t pay attention to the Forex markets. With the strengthening US dollar, it of course has a bit of a “knock on effect” over here. Pay attention to where the US dollar goes, because that dictates where Ethereum goes.