ETH/USD just dropped like a rock on the shorter time frame charts, but quickly ran into a wall of buy orders to limit pain for the bulls. Is this a short-term buying opportunity to get in one of the hottest crypto markets?
Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at a potential bearish setup on USD/JPY, so be sure to check that out to see if there is still a potential play!
Intermarket Update:
| Equity Markets | Bond Yields | Commodities & Crypto |
|
DAX: 15400.41 +0.00% FTSE: 7123.68 -0.08% S&P 500: 4188.43 -1.04% NASDAQ: 13401.86 -2.55% |
US 10-YR: 1.60% +0.027 Bund 10-YR: -0.204% +0.01 UK 10-YR: 0.795% +0.006 JPN 10-YR: 0.094% +0.015 |
Oil: 64.86 -0.06% Gold: 1,837.00 +0.31% Bitcoin: $55,522.012 -4.74% Ethereum: $3,942.55 +1.88% |
Fresh Market Headlines & Economic Data:
Stocks fall to start the week as tech stocks drag down market, Nasdaq loses 2.5%
Fed’s Evans says employment and inflation need to pick up before policy changes
Fed’s Kaplan sees strong job gains ahead, wants taper talk
New York Fed: Future Price Increase Expectations Jump Higher Again in April
WHO classifies triple-mutant Covid variant from India as global health risk
Raising pace of bond buys not off the table for ECB: Lane
UK house prices increase at fastest rate in five years
Boris Johnson announces new lifting of COVID-19 restrictions
Upcoming Potential Catalysts on the Economic Calendar
Japan Household Spending at 11:30 pm GMT
BOJ Summary of Opinions at 11:50 pm GMT
Australia New Home Sales at 12:00 am GMT (May 11)
China CPI, PPI at 1:30 am GMT (May 11)
Germany Wholesale Prices at 6:00 am GMT (May 11)
ZEW Economic Sentiment at 9:00 am GMT (May 11)
What to Watch: ETH/USD
Without a major currency catalyst in the upcoming in the Asia and London session, we think the best short-term opportunity may lay with ETH/USD, which just sold off roughly 12% in the last few hours. But that’s not all as the pair quickly found buying support around the $3650 area, and rebounded to the $3900 at the time of this writing.
There were no apparent major news events from the crypto space to attribute to the sell-off, so it’s likely related to the broad market weakness we’re currently seeing in the equity, commodity and crypto markets. And being that the moves are fresh and we have yet to see Asia and London trade them, the next few intraday sessions may remain volatile for ETH/USD.
Given the daily ATR of ETH/USD at over $250, that means we could see another retest of the $3650 area or lower, and if so, the question is whether or not traders will use that as a buying opportunity to jump in the the wild uptrend that took Ether from the $2000 handle to $4000 in just two weeks.
If that area doesn’t hold again on a retest, then the odds rise that a full blown technical correction may be upon ETH bulls. A break below the rising ‘lows’ pattern on the one hour chart above could draw in momentum shorts/profit takers, which could take ETH down as low as the $3200 -$3300 before possibly stabilizing around the early May consolidation area.
