Ethereum is one of the most divisive cryptocurrencies in the industry. Bitcoiners tend to dismiss its potential while those who entered the space in 2017 have a strong affinity with it following the boom in ICOs.
Three years on from the unsustainable ICO bubble has paved the way for a new Ethereum-based wave of hype, with decentralised finance (DeFi) projects popping up at an alarming rate.
Last week Coin Rivet covered why DeFi was the next bubble to pop in crypto with uninformed investors chasing unimaginable returns from projects with market caps lower than $10 million.
But, in Ethereum’s case this is bullish regardless of the eventual outcome. As investors become more keen on the idea of putting capital on these erc-20 tokens, they will need to first purchase Ethereum to contribute.
Then when it comes to liquidating their potential profits, they will most likely trade with an Ethereum trading pair, thus equating to more buyside pressure on the ETH/USD pair.
This, coupled with the recent Bitcoin halving, creates a scenario that could well see Ethereum eclipse its all-time high in Q4 of this year.
Bitcoin has rallied by more than 20% over the past week with Ethereum experiencing a similar surge, if it can begin to take on levels of support and resistance set in the 2017 bull run and subsequent bear market, it would almost certainly prompt another wave of retail investment from those who have been waiting on the sidelines for the past few years.
It’s worth pointing out that Ethereum’s all-time high is $1,415, which would mean from its current position it would need to rally by 339.21%.
While this seems unlikely, it’s important to consider that Ethereum has surged by 199.2% since march 12’s low of $107 and that was without the impact of a new DeFi bubble.
Now, cryptocurrencies are incredibly volatile assets due to a relative lack of liquidity in order books. This means that although Ethereum is demonstrating signs of bullish continuation, all it takes is a very minor catalyst to spark a correction to the downside, with a severe second spike in covid-19 cases potentially having that ability.
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Disclaimer: This article is not intended as financial advice. The author of this article does not hold or have a vested interest in Ethereum.