Throughout the past month, the price of Ethereum (ETH) increased from $126 to $140, by more than 11 percent against the U.S. dollar.
Similar to how several strategists expect the bitcoin price to increase substantially if it breaks the $4,200 resistance level in the near-term, traders foresee Ethereum rising to as high as $200 if it rebounds over crucial levels.
According to a cryptocurrency technical trader recognized by the community as “The Crypto Dog,” the price of Ethereum could surpass $200 if it breaks out of $148 and continues to demonstrate momentum in the weeks to come.
However, the potential scenario in which Ethereum climbs to the $200 region is conditional in that it would have to break out of a resistance level it has struggled to test since February.
One positive indicator for the short-term price trend of Ethereum is the strong performance of alternative cryptocurrencies.
In the past 24 hours, tokens in the likes of Bibox Token, Tezos, Aion, Waltonchain, and Aeternity recorded gains in the range of 5 to 65 percent against the U.S. dollar.
The stagnant price trend of bitcoin suggests that new inflow of capital is not coming in but rather existing capital in the cryptocurrency market is flowing into alternative cryptocurrencies.
An increasing number of investors in the cryptocurrency allocating capital into higher risk alternatives like tokens and low market cap cryptocurrencies demonstrate the change in sentiment around the near-term performance of the market.
On Saturday, economist Alex Krüger stated that the bear market of crypto has been over since January and that bitcoin moving above $4,200 would signal the end for the bear trend of bitcoin as well.
“The crypto bear market has been over for three months now. BTC breaking above $4,200 will mark the end of the bear trend that started in January 2018. Going to miss this big fellow,” he said, adding, “this is not a call. Not a matter of aging well or not. A break above $4,200 technically ends the bear trend that started Jan 2018. Facts don’t care about opinions.”
Historically, many alternative crypto assets have followed the price movement of Ethereum, recording intensified movements based on the trend of the second most valuable digital asset in the global market.
However, in recent weeks, cryptocurrencies have begun to show independent price movements, which indicate that Ethereum could still be vulnerable to a short-term drop even though alternative cryptocurrencies continue to surge in value.
Ethereum potentially breaking out of $200 and bitcoin breaking out of a 15-month bear trend are all conditional and certain resistance levels have to be broken in the weeks to come.
Bitcoin has not broken out of any key resistance level in the past three months and when it first attempted to do so last month, it dropped immediately down to $3,800.
“Here’s the other side: Bitcoin hasn’t broken a major resistance level yet and volume is only so so. We have not seen a real break out yet, there’s no confirmation,” the analyst said.
Hence, many traders remain cautiously optimistic in the medium-term trend of cryptocurrencies, expecting both a potential breakout above crucial resistance levels and the possibility of dominant crypto assets dipping to support levels.
Click here for a real-time ethereum price chart.
Last modified: August 2, 2020 10:57 AM UTC