The price of Ether (ETH) rose above $ 730 for the first time since May 2018. After the outbreak of ETH, traders are becoming more optimistic about their short-term development.
There are two main factors behind the strong rally in ETH: a strong technical market structure and the listing of the CME Ethereum futures in January 2021.
Ethereum continues to see the “higher high” pattern
In technical analysis, the higher peak pattern often indicates strong dynamics as it shows that each new peak is higher than the previous peak.
The ether has continuously recovered in the last week and maintained the higher formation. Cryptocurrency trader Scott Melker said:
“Endless series of higher highs and higher lows, with the most recent low confirmed by a new higher high. I consider this pattern to be the ‘stairs to heaven’. “
On December 28, Michael van de Poppe, a full-time trader on the Amsterdam Stock Exchange, said that ETH is likely to be likely to be $ 1,200-1,300 if it stays above $ 470. He wrote:
“In general, #Ethereum still has a very optimistic outlook as it consistently makes higher highs and higher lows. That hasn’t changed. As long as $ 470 holds up, the next run will bring the markets to $ 1,200-1,300 or a new ATH in the first quarter of 2021. “ETH price chart with key levels. Source: Michael van de Poppe, TradingView.com
Since Bitcoin exceeded its previous all-time high of around 20,000 US dollars, ETH has stagnated compared to Bitcoin. For Ether to experience another rally, a breakout against Bitcoin is vital.
On the daily chart, ETH has started showing some gains against Bitcoin, which could fuel the newly discovered demand for ether.
Santiment analysts said ETH miners’ balances are at a two-year low and supply on the exchanges is also declining.
Ethereum supply and miners’ balances. Source: Santiment
The combination of the two data points shows that the selling pressure on ETH is easing. They declared:
“On what is usually the slowest trading day of the week, #Ethereum cracked $ 700 for the first time since May 19, 2018 on a great #altcoin Sunday. The credit balance of the ETH miners is at a 2-year low and the supply on exchanges is at a 1.5-year low. Both great validators. “
What happens next?
Futures on the Chicago Mercantile Exchange (CME) should start in 43 days. According to Bybt.com, the CME is already the largest Bitcoin futures exchange in terms of open interest.
The term open interest refers to the total amount of capital that is actively traded on the exchange. As of December 28, the open interest of the CME Bitcoin futures exchange is over USD 1.67 billion.
Some analysts believe that institutional demand for Bitcoin will spill over to Ethereum in 2021.
If so, the CME Ethereum futures exchange would likely see significant growth in daily volume and open positions. Ryan Watkins, a researcher at Messari, said:
Forecast for 2021: From 2021 we will see institutions buying ETH. Once you accept that Bitcoin can be valuable, you open yourself to the possibility that other cryptoassets can also be valuable. From there, it’s a lot easier to jump from $ BTC to $ ETH. “
