On Friday morning, ETH prices moved sideways against the U.S. dollar, rising a measly 0.03%.
This brought the Ethereum to USD exchange rate to $835.90. But that number is completely boring. I am much more interested in the Ethereum to Bitcoin rate, which rose 1.83% to 0.1 BTC. Here’s what I find fascinating.
ETH/BTC Raises Important Question About Crypto Recovery
According to analyst Gaurav S. Iyer, Profitconfidential, The ETH/BTC ratio only jumped above 0.1 BTC in January 2018. It was an important milestone because it recognized that Ethereum prices were moving independently from Bitcoin. Investors weren’t lumping the two cryptos together.
This decoupling is crucial to Ethereum’s long-term success.
Investors need to see ETH as fundamentally different than Bitcoin. If they can treat it as a hedge to Bitcoin, run to it in times of uncertainty, and insulate it from Bitcoin’s woes—then we know an Ethereum rally is genuine.
However, investors got something like collective amnesia from the recent market crash. They are treating Bitcoin Cash as the main counterweight to Bitcoin, rather than Ethereum. As a result, ETH and BTC prices are back to moving in sync.
Today’s uptick of the ETH/BTC rate gives me some hope that investors might come to their senses, but one data point is far from conclusive. I need to see a true decoupling before I get excited.
Without the decoupling, investors could flock to Bitcoin in a recovery. This would cause a precipitous fall in the ETH to BTC ratio, starting a vicious cycle that locks Ethereum prices below $1,000.
Ethereum (ETH) has essentially moved in lock-step with Bitcoin over the past week. Having retraced over 50%, the cryptocurrency is now recovering. The market cap stands at US$79.2 billion, with US$3.18 billion in trading volume over the last 24 hours.
Research and development of Ethereum’s move Proof of Work (PoW) to Proof of Stake (PoS) continues, although it’s currently in the first of many stages. The PoS consensus mechanism, Casper, will consist of two projects that are currently being hybridized; Buterin’s Friendly Finality Gadget (FFG) and Zamfir’s Correct By Construction (CBC).
A nascent form of Casper has been running on the testnet for the past few weeks but has run into several problems with node connections. These issues suggest that Casper may not be ready for the next protocol improvement harfork, Constantinople. However, Casper’s ability to finalize blocks is working as intended. Also in development are Plasma, which addresses smart contract scalability, and Sharding, a type of database partitioning designed to facilitate the growing blockchain size.
The Ethereum network hash rate has continued to march North, despite a decreased block reward from 5ETH to 3ETH. Difficulty is nearing levels not seen since October, when the Byzantine hard fork effecting the block reward change was released. These changes to the are designed to discourage PoW over time, with PoS taking over the network.
Ethereum has maintained its price levels above the $799 levels from the time it rose from the lowest price on Jan 6.
Currently, it trades at $809 (updated- check the below chart for realtime price)and this represents a slight improvement from the previous analysis price index. Therefore, according to the current trends on cryptocurrencies, we expect Ethereum to rise towards the $950 levels in a few days.
Therefore, we expect the investors to be engaging in buying trends to incur long-term profits this year. Later in the year, we expect the Cryptocurrency to rise back above the $1,500 levels. Therefore, the minimum purchase is encouraged at this stage.
Ethereum price analysis: ETH/USD upside remains capped by $850
Firm resistance seen at $850 during trading on Friday
ETH/USD stuck within a horizonal channel
200DMA keeping price at bay
According to fxstreet, Ethereum during trading on Friday is being held by strong resistance seen around $850, after its big recovery in price earlier in the week. Across the market, there appears to be a cautious theme of trading, given this week’s events, that resulted in large swings.
The market bias remains to be chosen, looking technically, ETH/USD is currently trading within a horizontal channel, with the upper trendline holding around $850 as resistance. Support at the lower trendline is around $750 as has proven.
Within the H1 time frame view, the 200DMA is also seen at the upper resistance mentioned. Should ETH/USD break out of this horizontal channel, doors can be reopened to see prices back above the $900 area.