The Ethereum price has dropped dramatically in the past 30 days. Was this because of Coronavirus or we expected this down movement? What is the Ethereum price prediction for 2020? Should we hold, sell or buy?
These are the questions I have been recently asked very frequently. Therefore, I decided to write an article and explain everything.
Before you read the rest of this article, please note that this is NOT a trading or investment advice and we are not trading and investment advisers. We are sharing this just to answer the questions of those who are interested in these market. You understand that you buy/sell/hold at your own risk.
Analysis of the Ethereum Price Chart
I think it was few days before January 2020 that a friend asked me whether he should buy Ethereum, or he’d better to wait more. He asked this question because Ethereum was going down even at that time and before Coronavirus showed up.
The Ethereum price chart you can see below, and the Fibonacci levels I have plotted on it, go back to that time (I mean few days before 2020 was started).
Therefore, I told my friend that Ethereum would still go down, while the price was almost at $160 as far as I remember. As there was (and still is) a strong support level at $80.00, and the price was going down, I expected it to go down to test the $80 level before it would turn around and go up.
I told my friend that if I wanted to buy Ethereum, I would wait for it to test the $80 level first. If it did this, I would buy. If it didn’t, I wouldn’t get in. The reason is that I wanted to know whether the $80 level was still strong enough, and could prevent the price from going down while I am long (I have bought and am holding Ethereum), or bears were strong enough to take the price even below $80. If the price broke below $80, it could go much lower. If it stayed above this level and formed a buy signal there, it would most probably go up.
Markets and support/resistance levels behave like this. That’s why.
This is simply how we analyze the markets.
What if it started going up strongly before it tested the $80?
I would miss the chance to get in then. But it is OK, because you never know how the market will move. All you can do is waiting for some strong signals to form. That is all.
You can’t get in a market based on probabilities. You need strong reasons to get in and out.
This is how you must make your decisions. Maybe it looks like a too conservative point of view, but this is how I decide for myself. I need strong reasons that assure me whether the Ethereum price will go up or not. I can’t buy and get in the market just because Ethereum has been going down for a while and some people say it will start going up soon. What if it doesn’t?
So, what happened then?
The Ethereum price didn’t go down to test the $80 at that time. It turned around and went up before reaching the $80 level. It went up and tested the 61.80% Fibonacci level at around $287 (the yellow ellipse).
This means people like my friend and me missed the chance to buy and get in the Ethereum market, because it never tested the $80 before it went up. We have been waiting for the price to go down and test the $80 support level, and wanted to buy if it formed a strong buy signal or long trade setup above this level. But it never did it.
It is too bad, isn’t it?
Well! This is how it works if you don’t want to lose your money. You can’t catch all movements, and you can’t make profit from all price fluctuations. Professional traders are usually out when over 90% of the markets’ movements form. I told you about the reasons above: We need strong reasons to get in, otherwise we prefer to stay out.
When the price was heading to the 100% level at $362, the Coronavirus story was started. It made all markets panic. Fear took the control, and the Ethereum price also started going down like crazy.
The Ethereum price went down but didn’t completely reach the $80 level, and the 2020.03.08 weekly candlestick formed a relatively strong lower shadow few pips above the $80 level, which means the bullish pressure was already started.
Does it mean I am going to buy now?
Absolutely not. It is possible that the Ethereum price never tries to break below the $80 strongly by touching this level. But it is only few pips above this level which is still acceptable as a support level test, although I preferred it to touch the $80 level.
However, if it forms a strong long trade setup where it currently is, it can be a good signal to get in. But the long trade setup has to be strong enough. I mean something like a strong Bullish Engulfing Pattern.
For example, if the current weekly candlestick forms a strong bullish body that covers (engulfs) the body of the last week’s candlestick, we will have a strong buy signal. But I don’t see such a thing for now. We have to wait for the candlestick to close.
So, What Is the Ethereum Price Prediction for 2020?
Here is what I think:
If the Ethereum price forms a strong buy signal above the $80 level which is where it currently is, it will most probably go up and break above the resistance line (see the above chart), and then it can go much higher to reach the 100% level at $362. If the world succeeds to turn off the Coronavirus pandemic while such price movements are forming, then we can expect to see a strong bullish market for the next several months during 2020 and even 2021.
This is what I think.
Again, please note that this is NOT a trading or investment advice and we are not trading and investment advisers. We are sharing this just to answer the questions of those who are interested in these market. You understand that you buy/sell/hold at your own risk.
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