Ethereum price has been still sideway, after plunging to a low below $ 120 last week. Yesterday, a notable bullish force took place on Ether (as with most other cryptocurrencies), pulling the price back to the $ 13x zone. After a flourishing day, the momentum could not sustain; the price continued to decline.
For Ethereum to maintain this new momentum, Bitcoin must remain above the $ 7,500 area, as a break above this level could cause a significant rally to allow large altcoins like ETH to follow Bitcoin’s momentum.
Popular analyst Mayne said he was holding a long position on Ethereum and believed that ETH would bring higher profits when Bitcoin breaks the current resistance level and targets the next resistance of $ 8,000.
There is the EQ/breaker retest. Trading midrange is always a little dicey, I didn’t pull trigger on this one, still riding my $ETH long.
At HTF resistance on BTC, I saw a lot of people talking about shorting this area. I see a 3D SFP and bullish engulfing, $8k+ likely IMO. pic.twitter.com/Vll4scMcZx
— Mayne (@Tradermayne) December 22, 2019
However, today Bitcoin reversed a 3% decline to the $ 7300 area. And as a result, Ethereum followed the downtrend of No.1 and even more. At the time of writing, ETH is the biggest loser in the top 10 with a near 5% drop and is trading at $ 128.
Ethereum is outperforming Bitcoin
Ethereum’s trading volume is almost double that of Bitcoin when the year is about to end.
On the final day, 529,000 transactions were processed on the Ethereum network, while 280,000 transactions were processed on Bitcoin’s network, according to BitInfoCharts.
Source: BitInfoCharts
The Ethereum network has been continuously handling more transactions since October 2017, largely due to the fact that in addition to the native cryptocurrency ETH, the blockchain is also used to move Ethereum-based tokens.
Besides, Ethereum is still king in the world of decentralized applications, up 118% in the blockchain DApp ecosystem in 2019, according to a new report from DappReview. Despite the negative price action of the coin in 2019, DappReview pointed to an increase in trading volume for ETH throughout the year as a sign of life.
Will DeFi accelerate any ETH race?
The DeFi trend that has swept across cryptocurrency markets could prove to be very high for Ethereum in the long run, as it has led to a significant amount of ETH being locked.
According to data from Defipulse.com, Ethereum currently has more than $ 660 million locked in various DeFi initiatives, helping to increase the scarcity of cryptocurrencies by reducing the supply of circulation.
Source: defipulse
As this number continues to rise in the coming months, it is likely that DeFi may be able to strengthen Ethereum’s underlying strength and accelerate any price increases for ETH in the near future.
Other positive aspects include the almost complete transition of the Tether stablecoin from its original Omni protocol (running on the Bitcoin blockchain) to Ethereum’s ERC20 variant.
This is an element of ‘Ethereum Flippening,’ in which the number of transactions on the Ethereum blockchain related to its ETH cryptocurrency has been surpassed by the number of transactions from ERC20 tokens based on Ethereum.
Ethereum proponents say that increasing the use of blockchain will eventually drive ETH prices, while skeptics say that ETH needs to prove its use case as a form of pre-feasibility.
Will Ethereum rally in 2020?
Since the time Ethereum hit a local low of below $ 141 since the end of November, as can be seen in the chart below, December has been disappointing for the bulls.
Source: Trading View
Traders with long positions have trusted Ethereum to bounce up and at least be able to return to $ 200 or even $ 300. So far, $ 300 seems to be overly optimistic, although this is the price that was seen in June 2019.
Source: Trading View
From a protocol and price standpoint, the initial excitement surrounding the successful implementation of the Constantinople hard fork and the ETH price reclaiming $ 200 – further encouraged by a year-over-year surge of + $ 300 – was demonstrated shortly.
The Istanbul hard fork was successfully completed in December but did not significantly affect the price, led the Ethereum bulls to hope for the future impact of the Serenity upgrade that will provide Ethereum 2.0, starting in Q1 2020 but may not be complete until 2022.
On the other hand, historical data and the situation in the future cryptocurrency market show that the bullish scenario is still possible. There are currently no hefty technical signs preventing Ethereum from returning to $ 400 in the next few trading weeks.
Crypto contracts are becoming more and more popular in the blockchain community. If futures contracts on the standard markets, this could open up a gap, which could be a strong sign for price increases.
The fundamentals are very strong when in 2019, Ethereum added four million active addresses and a total of 20 million new accounts (including passive). The community reports that more than 520 Ethereum applications have been brought to life, bringing the total to over 2700 by the end of the year.
Although there are many signs that prices may bounce, a bearish reversal scenario can also occur when Ethereum price is near the lows.
Ethereum price today. Source: Coinmarketcap
Disclaimer: This is not trading advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
Read more:
- Fractal ETH Proposes A New Market Cycle That Can Drive The Ethereum Price Up To 0.25 BTC
- As Ethereum Nodes Kept Falling Over The Course Of 2019, Bitcoin Nodes Continued To Grow