Wednesday, January 29, 2022

Ethereum [ETH] Price Analysis: Bulls are Firm and May Double, Rallying to $365 or June 2019 Highs

Ethereum is stronger than never before. This is the view of Vitalik Buterin. The network, for its innovativeness and rapid development in the last 5 years has been nothing but impressive. Not only has coin owners benefitted from the sharp rise in asset prices but the platform, because of smart contracts, has continued to be disruptive.

The Rise of DeFi apps

From ICO to IEOs and now DeFi, smart contracting has been revolutionized finance. Yet while Ethereum developers ape the centralized models of traditional finance, implementing the same in blockchains and riding the middle man, there are some quarters that are not comfortable with the networking effect of DeFi.

They are particularly worried about the millions of ETHs locked in these dapps and how they could be catastrophic to Ethereum ecosystem should a Black Swan happen and coins lost through a hack. Ethereum has experienced this before.

A Black Swan Event on the Table?

In 2016, the loss of millions of ETHs through the DAO hack kept ETH prices depressed for months. But now, more players and users are pouring in to DeFi, lending and borrowing funds in a decentralized manner.

For perspective, the allure of lending and borrowing apps meant more users flocked into Ethereum than any other platform in 2019. This alone is a testament of the strength of Ethereum, confidence that Vitalik exudes as ETH prices trend above a key resistance, now support, level.

ETH/USD Price Analysis

Ethereum Daily Chart 29/01/2022

At the time of press, ETH is changing hands at $177, adding 5% in the last trading week. Technically, bulls have the upper hand.

Notably, prices are trading above a key resistance, now support, level hinting at the level of confidence amongst traders and the probability of prices edging higher as sentiment shifts from negative to positive. In the weekly chart, prices are also above the 20-week Moving Average, a key resistance level.

Meanwhile, the support at the 20-day MA is positive for price action. Although yesterday’s bar ended up with a long upper wick hinting of sell pressure in lower timeframes, events in the weekly chart is leading.

Candlestick arrangements point at bulls and if signals in the weekly chart guides, even dip is ideally a buying opportunity for aggressive traders. In that case, it is likely that the influx of traders could push price to $365.

Chart courtesy of Trading View-Coinbase

Disclaimer: Views and opinions expressed are those of the author and is not investment advice. Trading of any form involves risk.  Do your research.

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