Ethereum Pulls Back as the Merge Approaches
Ethereum’s key upgrade to proof of stake is slated for next month. It’s a good time to review the No. 2 cryptocurrency’s technicals.
The first pattern on today’s chart is the sharp pullback from above $1,900 toward the $1,600 area. This brought price back to the 50-day simple moving average (SMA). Some investors could view this as a positive sign.
Second, the current dip represents a 38 percent retracement of the run between mid-June and mid-August. That Fibonacci pattern could make some traders look for continuation of the recent uptrend.
Third, the crypto has returned to the bottom of its Bollinger Bands. That pattern could make some range traders expect a potential bounce.
Fourth, the slide brought stochastics back toward an oversold condition for the first time since the recent bounce began.
Finally, it’s an interesting timeline with a lot of negativity in the market but a potentially positive catalyst on the horizon. Traders might sell the news once it happens, but it hasn’t happened yet.
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This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
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Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
The first pattern on today’s chart is the sharp pullback from above $1,900 toward the $1,600 area. This brought price back to the 50-day simple moving average (SMA). Some investors could view this as a positive sign.
Second, the current dip represents a 38 percent retracement of the run between mid-June and mid-August. That Fibonacci pattern could make some traders look for continuation of the recent uptrend.
Third, the crypto has returned to the bottom of its Bollinger Bands. That pattern could make some range traders expect a potential bounce.
Fourth, the slide brought stochastics back toward an oversold condition for the first time since the recent bounce began.
Finally, it’s an interesting timeline with a lot of negativity in the market but a potentially positive catalyst on the horizon. Traders might sell the news once it happens, but it hasn’t happened yet.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing in cryptocurrencies involves significant risks. Please click here for TradeStation Crypto’s risk disclosures on investing and trading in cryptocurrencies.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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