Ethereum is currently trading at $2,300 following a tremendous rally that has seen its price increase by 28.44% in the past week.
The world’s second-largest cryptocurrency is now lining up a test of the $2,600 level of resistance after closing above daily 50 exponential moving average for the first time since June 7.
Much of it will also depend on if Bitcoin can close a daily candle above the $40,400 level. This would confirm a bullish breakout on Bitcoin, which would result in a subsequent rally in the wider cryptocurrency market.
Aside from $2,600, the major upside target for Ethereum is coming in at $2,892 as this hasn’t been breached since the break down in price on May 19.
A move above that level would signify a major change in behaviour, which would lead to two potential scenarios.
The first, and most unlikely, scenario is a return to a cryptocurrency bull market with fresh all-time highs on the horizon. There is certainly a potential of this, but it would require a major, game-changing news event to override the ongoing frothy sentiment.
The most probable situation would be a bull trap, just as Bitcoin experienced a bear trap below $30,000 last week.
A bull trap is a market move that tempts even the most bearish macro traders into thinking a bullish outcome is on the cards. In this case, it would be if Ethererum breaks up above $3,000 on convincing volume, which would trap in bullish traders on high leverage before squeezing those positions with a subsequent move to the downside.
This would effectively cement a cryptocurrency bear market, with eventual targets down below $20,000.
Buterin had proposed that Bitcoin needed a scripting language. He decided to develop a new platform with a more general scripting language when he couldn’t get buy in to his proposal.
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As with any investment, it pays to do some homework before you part with your money. The prices of cryptocurrencies are volatile and go up and down quickly. This page is not recommending a particular currency or whether you should invest or not.
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