Ethereum (ETHUSD), the second-largest cryptocurrency by market capitalization, has surged impressively by 12% since the beginning of the year, propelled by the anticipation and subsequent approval of Bitcoin’s spot exchange-traded fund (ETF).
The rally in cryptocurrencies indicates a pivotal moment, fostering greater acceptance within traditional financial markets. Following BlackRock’s debut of a Bitcoin ETF, CEO Larry Fink hinted at a second ETF featuring Ethereum as the underlying cryptocurrency.
These developments signal the potential for a broader influx of capital into the crypto sphere, potentially buoying its market. However, challenges loom on the horizon, with a resilient Greenback gaining over 2% this year amid expectations of sustained higher interest rates and heightened safe-haven demand due to ongoing conflicts in the Middle East.
Technical
Since mid-October 2023, Ethereum’s price surge against the US Dollar has been formidable, marked by a convincing breach of the 100-day moving average and its residence within an ascending channel pattern.
Successfully surpassing the psychological barrier at $2500, the current trading position just above this level suggests sustained strength with room for growth. If the ongoing uptrend persists, the $3000 threshold emerges as a compelling point of interest.
Notably, support and resistance levels at $2167.68 and $2717.89 within the ascending channel provide crucial markers. A retracement from the upper boundary saw a stall at the 50% Fibonacci Retracement level, potentially setting the stage for a retest of the resistance level. However, a breakdown below the 50% level, especially with high volume, could bring the 61.80% Golden Ratio into focus, indicating a shift in market sentiment.
Summary
Ethereum’s impressive 12% surge since the year’s start, fuelled by Bitcoin ETF anticipation, signifies a pivotal moment for cryptocurrency acceptance in traditional markets. Despite potential challenges from a resilient Greenback, Ethereum’s technical prowess, breaching the $2500 level, hints at potential growth, with the $3000 threshold likely looming.
Sources: CME, Reuters, CoinDesk, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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