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Will ETH Tightening Wedge Break Up or Down? (June 12 Forecast)

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Crypto Daily FX
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Ethereum had a quiet Friday, trading in a small range to end the week on a bearish note as it slid about $500 to finish near the lower trendline. ETH appears to be developing a tightening wedge pattern that could break either way, but the bias is to the downside unless we get a break above $2,800.

(June 11, 2020 8:30 PM EST)

Short-Term:

ETH appears to have more downside as it falls in satoshis, indicating more downside for ETH/USD in the near-term. We could very well see a retest of the $2,000 level much like BTC just retested $31K before bouncing this week. Long-term, ETH is as promising as ever, especially given the increased adoption of the network, scalability progress, and macro investors starting to make allocations to ETH as well as BTC. If ETH breaks below $2,000, look for support at the 100% fib around $1,732 and the 200 Day EMA at $1,680. We could technically see a retracement to the January 2018 ATH at $1,400 and still keep this market cycle uptrend in tact, although I would be surprised to see ETH see another 40% drop from here.

ETH's next major impetus is the London hard fork scheduled for July. It is likely between now and then that ETH will continue to consolidate in anticipation of ETH's widely anticipated EIP-1559 possibly resulting in a deflationary monetary system. Proof of Stake is also likely a matter of months away, although we likely won't see that until Q4 2021 at the earliest.

ETH/BTC:

ETH/BTC is finally pulling back, dropping to about the 0.065 level after impressively holding it ground against BTC amid the May 50% selloff. This is to be expected and may be even be another sign of capital rotation out of alts and back into BTC. Look for support at the 50 Day EMA around 0.06. If ETH falls below there, look for the buyers to step in around 0.05, although we may not see a bottom until 0.04.

Support: 78.6% Fib around $2,295, then $2,000 / 0.06 ETH/BTC.

Resistance: $2,500. Keep an eye on 0.05 ETH/BTC.

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