Signs That the Value of Ether Could Continue to Rise

While it is true that Bitcoin is the most popular cryptocurrency around the world, in the last five years, altcoins have become very attractive in terms of investment. When I talk about altcoins I mean cryptocurrencies that are alternatives to Bitcoin. Many of these altcoins have generated investment returns of 1000%, 3000%, 5000% so far this year. Today I am going to do technical analysis of the most important altcoin: Ether (ETH)

Ethereum, considered the new internet protocol, is a blockchain with a decentralized public ledger that verifies and stores transactions. At the same time, it allows the creation and development of smart contracts on its blockchain. Ethereum has its own coin which is called Ether (ETH).

Ether (ETH) is the most important cryptocurrency of all the altcoins as it has the largest market capitalization after Bitcoin. The market capitalization of a cryptocurrency is found by multiplying the price of this by the number of coins that are in circulation. The table below shows the 5 largest cryptocurrencies in terms of market capitalization. From this group, Tether (USDT) belongs to the group of stablecoins.

 Source: Coingecko

Since mid-May 2021, when the price of Ether reached its all-time high trading at approximately $4,300/coin, the cryptocurrency market began a downward trend, and the price of Ether was no stranger to it.

     Tradingview. ETH/USD (Daily TF / Log Scale)

The price of Ether fell almost 60% from its peak and came to be worth approximately $1700/coin in mid-June. It is at this level of $1,700 that Ether consolidated and found a level of support, which means, there are many speculators who are willing to pay that price for Ether. In the previous article, I talked about a concept widely used in technical analysis called "Polarity Effect." That is, a previous support level becomes a resistance level and vice versa. In this case a resistance level became a support level. After testing that support level three times, the price of Ether began to climb in the following weeks. Let's take a look at the following table:

      Tradingview. ETH/USD (Daily TF / Log Scale)

Below, I will describe three reasons why I am cautiously optimistic that the price of Ether may continue to rise:

1. Currently the price of Ether is in a zone that is becoming support (level of $2,770-2,870). As you can see in the following table, the price cannot penetrate through that support zone. If the polarity effect remains, it is very likely that we will see new all-time highs in the price of Ether in the coming weeks.                                                                                                                                                                                                                                                                                                                                       
2. The price of Ether is near and above its 200-day moving average. The moving average helps to reduce the tone of the constant fluctuations in the price, which makes it easier to recognize whether the trend is changing direction or not. When the price is above the moving average line, it can be said that there is an upward trend. On the other hand, when the price is below the moving average line, it can be said that there is a downtrend. The 200-day moving average is a key technical indicator in most markets because it serves as a very strong support level.                                                                                                                                                                                                                                                                                                                                   
3. An uptrend is made up of higher highs and higher lows. Ether has made a higher high in early September and a higher low in late September. Let's look at the following table:                                                                                                                                                                                                                                                                             

When I say that I am cautiously optimistic that the price of Ether can continue to rise, I mean that there is no confirmation from volume yet.

     Tradingview. ETH/USD (Daily TF / Log Scale)

For all-time highs to happen, it is essential to see the volume of transactions increasing. In other words, new capital must come in.

Every Monday, I will publish a technical report on cryptocurrencies and other markets. If you have any questions, please do not hesitate to email me at andres@digitalcurrencyexchange.us.

Note: The information you find in these reports is not financial advice. Your investment in cryptocurrencies or another asset has to be proportional to your level of understanding of it.

Until next time!