Ethereum Expects to Hit $750 as Price Holds Key Technical Support
Ethereum blockchain native’s token ETH expects to reach $750 in the fourth quarter as it holds above a crucial technical support level.
On Monday, the ETH/USD exchange rate attempted to breach a short-term ascending trendline for the tenth time since November 26. But bulls held up near the supportive base, raising the pair’s potential to log a rebound in the coming hourly sessions.
But retracement to where? Apparently, each of the Ethereum token’s rebound from the support trendline has exhausted near a resistance level of $621. Together, both the trendlines give the impression of an Ascending Triangle structure, a technical pattern that traders consider bullish.
In retrospect, Ascending Triangles appear in the midst of an ongoing trend. They tend to behave as a stopover range, an area wherein the asset consolidates for a while before continuing in the direction of its previous trend. Traders develop their setups accordingly.
A $750 Ethereum
Ethereum’s ETH token has formed a similar structure, confirmed by a horizontal resistance trendline accompanied by a rising one. The cryptocurrency now trades within the structure’s range, only to a breakout later to the upside. It was rallying upward before it formed the consolidation pattern.
Ethereum's Ascending Triangle pattern. Source: ETHUSD on TradingView.com
Josh Rager, the co-founder of Blockroots.com — a crypto trading education platform, noted that ETH/USD’s consolidation inside the Ascending Triangle pattern raises its possibility to form a higher high. He noted that the next leg upward would be at least above $700.
“Ethereum is just grinding up slowly over the past month,” he explained. “If price can hold this trend and make its way back up to retest $610+ — I would expect the next move to be a higher-high With a push to over $700.”
Per the chart above, the consequential upside target for Ethereum is approximately $762. The Ascending Triangle breakouts typically shoots the asset upward by as much as the pattern’s maximum height. The AB line segment represents the height, which is about $141 long. The CD line segment is the expected breakout move and is equal to AB.
That serves as one of the main technical reasons why Ethereum could shoot upward. Meanwhile, fundamentals are supportive.
ETH 2.0, Ethereum’s breakaway from proof-of-work to become a full-fledged proof-of-stake platform, is now live with the launch of Beacon Chain. The community has shown support for the milestone upgrade by locking over $600 million worth of ETH in its core smart contract.
That has effectively removed at least a million ETH tokens out of active supply. Meanwhile, the token’s demand expects to shoot upward as more speculators join the Ethereum 2.0 bandwagon. Even Grayscale Investments, a New York-based crypto investment trust, admitted that they are witnessing a significant rise in “Ethereum only” investors, signifying the cryptocurrency’s reach the institutional circles.
“Over the course of 2020 we are seeing a new group of investors who are Ethereum first and in some cases Ethereum only,” said Grayscale’s managing director Michael Sonnenshein. “There’s a growing conviction around Ethereum as an asset class.”
Tapas Paul, the lead developer of YFDAI Finance — a yield farming platform, noted that Ethereum 2.0’s ability to make its blockchain cheaper would ensure sustainable demand for ETH.
“I see ETH 2.0 and the switch to POS as a critical milestone on Ethereum’s road to maturity,” he told NewsBTC via email. “It will offer greater revenue-generating capabilities to a much wider set of users, which will lead to mass adoption.This was a prime consideration for YFDAI when we made the decision to build on Ethereum.”
So it appears, more projects could join.