The Ethereum price rose above $ 730 for the first time since May 2018. After the price of ETH breaks out, traders are becoming more optimistic about the near-term development.
The Ethereum course is currently out of control. It almost seems as if a slumbering giant has finally woken up, but what exactly is behind the rapid price increase in Ethereum’s native crypto currency ETH and what can we still expect?
Some of the possible reasons that can explain the sudden rally are mainly the following two important factors for the Ethereum price:
Now let’s take a closer look at exactly what effects this has and could continue to have.
Ethereum price continues to make higher highs
In technical analysis, the higher high pattern often suggests strong momentum as it shows that each new high is higher than the previous one.
The Ethereum price has continuously recovered in the last week and maintained the „higher high“ formation. Cryptocurrency trader Scott Melker said:
An endless series of higher highs and higher lows, with the most recent low confirmed by a new higher high. I consider this pattern the ‚Stairway To Heaven‘.
Similarly, on December 28, Michael van de Poppe, a full-time trader on the Amsterdam Stock Exchange, said that if the Ethereum price stays above $ 470, ETH is likely to be $ 1,200 to $ 1,300. He wrote:
In general, Ethereum still has a very bullish outlook as it has consistently made higher highs and higher lows. This has not changed. As long as $ 470 holds, the next run will push the markets towards $ 1,200–1,300 or a new ATH in Q1 2021.
A breakout against Bitcoin is crucial
Since the Bitcoin price exceeded its previous all-time high of around $ 20,000, Ethereum has stagnated against Bitcoin . In order for Ether to experience another rally, a breakout against Bitcoin is crucial.
The analysts at Santiment announced that the ETH mineral balances are at a two-year low and that the supply on the stock exchanges is also decreasing.
Ethereum is getting scarcer
The combination of the two data points suggests that selling pressure on ETH is easing. The analysts stated:
On what is usually the slowest trading day of the week, Ethereum cracked the $ 700 mark for the first time since May 19, 2018 on a great altcoin Sunday. The ETH Miner credit is at a 2-year low & supply on exchanges is at a 1.5-year low. Both are great validators.
What’s next for the Ethereum course?
Meanwhile, the futures on the Chicago Mercantile Exchange (CME) should start in 43 days. According to data from Bybt.com, the CME is already the largest futures exchange for Bitcoin in terms of open interest.
The term open interest refers to the total amount of capital that is actively traded on the stock exchange. As of December 28, the open interest of the CME Bitcoin Futures exchange is over $ 1.67 billion.
Some analysts expect institutional demand for Bitcoin to spill over to Ethereum in 2021 as well.