Ethereum price surpassing $2,600 has a strong impact on altcoin market
Ethereum price confirmed a strong bullish signal yesterday after it closed a daily candle above $2,400. In fact, ETH broke through psychological resistance for the first time since June 14. Historically, when this happened, Ether also triggered minor altcoin rallies. At press time, ETH is changing hands at $2,600.
Ethereum price surpassing $2,600 has a strong impact on Cardano (ADA), Uniswap (UNI)
It’s impossible to pinpoint the exact reason behind Ether’s sharp drop from its all-time high, but soaring gas fees have certainly impacted investors’ expectations.
Ethereum 7-day average gas fees in USD | Source: CoinMetrics
The chart above shows that the $45 average gas fee took place a whole month after the Berlin upgrade went live on April 15. The consensus in the Ethereum community was that Berlin was less impactful in the short term but paved the way for the awaited London hard fork’s EIP-1559 protocol on August 4.
Over the past 11 days, the Ethereum price has recorded an increase of almost 40%, a slightly better figure than that of BTC. Now, though, ETH is skyrocketing on chats with its last 11 candlesticks closing in the green. And ETH’s rise above $2,600 shows some real strength. At the moment, all eyes are on a new high of $2,700. It needs to test this level.
ETH’s rally has previously often led to new gains in several altcoins. So, we analyzed some of the top correlated assets with Ethereum to understand if top altcoins collectively show any signs of revival. We will be looking at Uniswap and Cardano since these assets share a correlation of more than 0.85 with Ethereum
Some altcoins that share a correlation of 0.85 or higher with Ethereum | Source: Skew
Now, looking at the 1-day chart of Ethereum, the price has spiked for 10 days in a row, and this shows stronger bullish momentum.
ETH/USD 4-hour chart | Source: TradingView
Meanwhile, Cardano is still lagging behind the immediate resistance of $1.50. This means that buying pressure has not yet pushed its value above the safe zone. Meanwhile, volume is also at a lower level for competing assets.
ADA/USD 4-hour chart | Source: TradingView
With Uniswap, the difference appears to be much higher, with the cryptocurrency trading well below the $25 resistance. Now, while the Relative Strength Index or RSI did point to a surge in buying pressure, it was yet to clock in a bullish trend reversal.
Despite all the positive vibes, not everyone on the panel was crazy about Ethereum, and some even felt that the asset would never amount to anything compared with Bitcoin.
“I think Ethereum is a speculative bubble and will get dragged down by Bitcoin,” John Hawkins, a lecturer at the University of Canberra in Australia, stated.
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