The price of Ether (ETH) broke above $ 730 for the first time since May 2018. Following the breakout of ETH, traders are becoming more optimistic in its short-term trajectory.
Two major factors explain the strong recovery of ETH: a solid technical market structure and the listing of CME Ethereum futures in January 2021.
Ethereum continues to see the ‘higher’ model
In technical analysis, the higher high pattern often indicates strong momentum as it shows that each new peak is higher than the previous high.
The ether has continually rallied over the past week, supporting higher education. Cryptocurrency trader Scott Melker said:
“An endless series of higher ups and downs, with the most recent low confirmed by a new high. I consider this model to be the “Stairway To Heaven”. “
On December 28, Michael van de Poppe, a full time trader at the Amsterdam Stock Exchange, also said that $ 1,200 to $ 1,300 would be likely for ETH if it stays above $ 470. he wrote:
“In general, #Ethereum still has a very bullish outlook as it has consistently hit higher highs and lows. It hasn’t changed. As long as $ 470 holds, the next run will take the markets towards $ 1,200-1,300 or a new ATH in Q1 2021. “
Since Bitcoin broke its previous all-time high at around $ 20,000, ETH has stagnated against Bitcoin. Therefore, for Ether to see a renewed rally, a breakout against Bitcoin is essential.
On the daily chart, ETH has started showing gains against Bitcoin, which may fuel further demand for Ether.
Santiment analysts said ETH miners’ balances are at a two-year low and supply on the exchanges is also down.
The combination of the two data points indicates that the selling pressure on ETH is on the decline. They Explain:
“On what is normally the slowest trading day of the week, #Ethereum cracked $ 700 on a #altcoin big Sunday for the first time since May 19, 2018. $ ETH miners’ balances are lowest for 2 years and the stock market offer Lowest for 1.5 years. These two great validators. “
What happens next?
Meanwhile, Chicago Mercantile Exchange (CME) futures are expected to launch 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 a stock exchange. As of December 28, the open interest of the CME Bitcoin futures exchange is above $ 1.67 billion.
Some analysts expect institutional demand for Bitcoin to eventually spill over to Ethereum in 2021.
If that happens, the CME Ethereum futures exchange would likely see substantial growth in daily volume and open interest. Ryan Watkins, researcher at Messari, said:
“Prediction 2021: In 2021, we start to see institutions buying $ ETH Once you accept that Bitcoin can be valuable, it opens your mind to the possibility that other cryptoassets could be too. It’s a much easier switch from $ BTC to $ ETH from there. “