The technical outlook on Ethereum hasn’t changed much since our last update on it at the start of the month (see “Ethereum leads crypto upsurge as stocks slump” for more). As mentioned then, ETH/USD was showing relative strength among the major cryptos, which still remains the case. Although last week’s pullback saw Ethereum go below the $700 support level, it has now risen back above it and price never broke below the invalidation level of $627 to tilt the bias back to bearish. With Ethereum also back above the 200-day average, the bullish bias thus remains intact for the time being. We had also identified the area between $800 and $835, which was formerly support, as the next resistance zone. As it turned out, this area did in fact turn into resistance. However, the resulting sell-off from this area has been mild thus far, pointing to modest profit-taking there.
Going forward, the bulls will be hoping that it clears this $800-$835 resistance range in order to confirm that the buyers are well and truly in control again. If this happens to be the case then the next bullish objective would be the 61.8% Fibonacci retracement level at $1016/7. Alternatively, if Ethereum goes back below the aforementioned $700 support level and holds below it for a while then this would increase the likelihood of a breakdown below that $627 level. In this potential scenario, Ethereum’s next stop could very well be around the next support at $535 or lower.