Ethereum is showing signs of strength as it trades back above the $366 level of resistance turned support.
The world’s second largest cryptocurrency is currently trading up at $378.58, which is 19.94% higher than the low of $317 on September 5.
The significant rise in the price of Ethereum over the past 10 days coincides with the recovery in the DeFi sector, spurred by Yearn Finance (YFI)’s recent hike above $40,000.
With the majority of DeFi products being based on Ethereum’s blockchain, it’s natural that the underlying asset will rise will surge as positive sentiment in DeFi returns.
The recent SushiSwap saga has demonstrated the fragility and immaturity of the DeFi market, with several investors losing out before FTX CEO Sam Bankman-Fried took control of the project, causing the Sushi token to rise.
As more and more investors begin to swap margin trading for the equally as risky yield farming, Ethereum will likely continue its rally to back above $425 in the coming weeks.
It’s now safe to say that the $366 level of support is a solid foundation for a move to the upside as it bounced from this level on numerous occasions in August.
If Ethereum can continue its uptick before the typically low volume weekend, it is forecast to test the $407 level of resistance before eventually testing the local high of $490.
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About Ethereum
Ethereum was launched by Vitalik Buterin on July 30 2015. He was a researcher and programmer working on Bitcoin Magazine and he initially wrote a whitepaper in 2013 describing Ethereum.
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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