2021 will have represented the year of the emergence of Ethereum (ETH). Its price has indeed risen from 737 to more than 4000 dollars to the point of dominating Bitcoin with insolent growth. Although one year does not make a long-term trend, one is entitled to wonder if it will even one day overtake the king of cryptos in terms of market capitalization. Even if this prospect is distant, investors should include this scenario in the back of their minds. If we go back to the thread of the news, the weeks follow one another and look alike. Ethereum keeps yo-yoing around $4000. It is clear that it is a tough battle between buyers and sellers around this key and symbolic medium. And technical analyzes in weekly and daily units leave room for uncertainty.
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Ethereume: A fifth consecutive week of decline
Our very close attention to the bullish channel and the support of 4000 dollars, made us forget that Ethereum could conclude a fifth consecutive week on the decline. This would be a first since November 2016. And if it were to be a reality, the bull run in place since July 21 would again be put to the test.
In weekly units, ETH prices remain slightly below the Tenkan, the price average of the highs and lows of the last 9 sessions. We see that it is flattening to the point of becoming resistance along with the lower boundary of the bullish channel.
If the two resistances which are at the same level at time T fully play their role, the rebound attempts would end in failure. The sellers would have the final say if the $4000 support jumps for good. Nevertheless, the underlying trend (not to be confused with the current bull run) remains bullish. ETH prices will still be above the Kumo (Ichimoku cloud). Ditto for the Chikou Span, the curve which takes up the variations of the underlying with 26 sessions behind.
It should be noted that seeing the prince of cryptos return to the Kijun or the 3400 dollars would not in itself be a disaster given its rise since mid-2020.
Tenacious short-term bearish momentum for Ethereum
In daily units, the Christmas weekend rebound did not have the expected effect. The graph below clearly shows us that Ethereum prices stumbled on bullish channel boundary, Kumo low and Kijun, the average price of the average points of the last 26 sessions, in the space of a few days. This triple negative signal does not delight supporters of cryptocurrencies.
Now, the sellers could initiate the counterattack at the $4000 support. In the same line, the Tenkan would be sunk while the Chikou Span would drop below 4000 dollars and the Kumo. The next targets would be respectively support around 3600-3700 and 3400 dollars which are close to the weekly Kijun.
If the prince of cryptos manages to stay above $4000 and inside the bullish channel, the downtrend line (in orange) from its November 10th ATH would be a major hurdle for a sustainable rebound.
In summary, the Ethereum will settle a year 2021 of all records regardless of the fate of the support of 4000 dollars. The fact that it clearly outperforms Bitcoin is a testament to the gradual maturity of the cryptocurrency cycle. The most informed investors are indeed becoming aware that it is an asset class in its own right and a serious component in the context of the diversification of a portfolio.
After the dominance of Bitcoin in 2020 (phase 1) and the revelation of Ethereum in 2021 (phase 2), the year 2022 could constitute phases 3 and 4 of the cryptocurrency cycle. Phases that promise to be exciting and which could be characterized by an explosion in the prices of certain altcoins.
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