Crypto markets have been doing well recently after the prolonged crypto winter. Even though Bitcoin stole all the headlines, other coins were also doing very well, especially when it comes to Ethereum. From the start of the year, it has risen more than three times, going from below $100 to well over $300. Technical analysis and strong fundamentals suggest that the coin could keep the momentum going, possibly reaching a 52 week high.
Bitcoin is surging
One of the main reasons for the current price rally experienced by Ethereum is Bitcoin. This is because crypto has an unusual price correlation. Whenever a price rise is experienced by one coin, almost every other coin experiences a similar change in price. The reverse also holds true, although there are no clear reasons as to why this happens. Most of the coins are gaining lost grounds from the crypto winter.
Ethereum transactions increasing
Another reason is the fact that there is an increase in the number of transactions that are happening in the network. This increased traffic is a sign of growing confidence among the users. Daily transactions registered on the Ethereum (ETH) network exceeded one million on June 28, for the first time since May 2018, according to data reported by leading Ethereum block explorer Etherscan. As per Etherscan’s data, on June 28 there were 1,004,170 transactions confirmed on the Ethereum blockchain. Before yesterday, the last time the Ethereum chain registered over one million daily transactions was in May 2018. This is not the highest number of transactions recorded on the network. That happened due to the hard fork caused by the DAO hack in 2016.
The technical analysis reveals that Ethereum could reach a new high, the main reason being the high number of transactions. Ethereum, like Bitcoin over the last few months, has continuously broken resistance. Currently, the resistance is at $340, and the major support level is at $310. The resistance of $340 is a bit high and this is due to strong fundamentals and the positive emotions within the market. The price has taken a small hit, however, it was a minor correction that was anticipated. But the price is still higher than the 3 month low of $140.
One aspect that many commonly miss is the upcoming regulatory scrutiny cryptocurrencies are going to face. As of now, it seems the guidelines given by FATF will be adopted without many amendments. If that happens, it will disrupt the current momentum and will lead prices to downward paths. While it might be a good time to offload some of the crypto assets, it is safe to say that until any kind of confirmation happens about the FATF guidelines, it is quite common-sense not to buy excessively into crypto.
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