The price reached a new all-time high. Does it still look like an attractive buying opportunity?

Ethereum (ETH) is the second largest cryptocurrency with a market capitalization of $240 billion at the time of writing.

Let’s first talk about what ETH actually is.

Ethereum is a decentralized smart contract platform and the world’s second most popular cryptocurrency. In fact, Ethereum’s platform could be used for building anything, from supply chain tracking systems and decentralized exchanges to digital art marketplaces and Decentralized Finance (DeFi), which is currently the most popular offering.

As a matter of fact, Ethereum was created to fill some gaps and address some of the shortfalls of Bitcoin. Bitcoin is the first and largest cryptocurrency and it is great for storing wealth as it is considered the most secure crypto currency in the world. However, it lacks complex functionality. In other words, you could use Bitcoin to send and receive transactions, but it doesn’t support smart contracts. This is exactly where Ethereum comes in.

The Ethereum platform offers a high level of customization, allowing developers to create products, such as decentralized applications, complex smart contracts, as well as tokens. Since ETH is decentralized, anyone could create and launch anything – the value of decentralization offered by the network that has helped Ethereum become so popular.

Moreover, thanks to its great network, Ethereum has got the largest developer community in the world, which has become even larger than Bitcoin’s.

Since 2017 when cryptocurrencies became really hot and popular around the globe, many of the biggest companies out there have started using Ethereum and incorporating it in their business operations. Among the first companies to do that were Intel, JPMorgan, Microsoft and Thomson Reuters. A year later, the number of big companies using the network had increased to over 200 and counting. Those companies have decided to use the Ethereum platform for a number of reasons, such as speed and efficiency, as well as its ability to execute smart contracts.

Based on Ethereum’s great efficiency and usability, as well as high expectations for the future, many analysts claim that it would be even more successful than Bitcoin. Well, time will show.

Technical analysis

Ethereum has been a huge success in the past year. In fact, investors looking for alternative investment opportunities have been widely interested in buying the leading cryptocurrencies out there, which they consider a store of value and a hedge against inflation, which is quite an issue with many other asset classes.

ETH had dropped to only $88 on the 13th of March and that was caused by the coronavirus outbreak and the fears about the economic slowdown that actually followed afterwards. Yet, that gave an amazing buying opportunity at only $88, after the price had dropped from $1500 in early 2018. As we mentioned above, Ethereum is the second cryptocurrency out there and its network is considered the most potential one for the future that is already being used by many large corporations. We believe that’s only the beginning and Ethereum would see a lot more use of its services in the future, which is expected to drive its share price even higher.
The price has already bounced towards the current levels at $2061, which is close to the all-time highs at $2100 it hit in early April. In other words, the price has gone up over 2200% in the past year and investors and traders following the surge on the price have been making high profits to the upside.
We have been big fans of Ethereum and have been making high profits on it since 2017. Overall, we believe the price would continue rising in the future and are looking for some short-term profit-taking corrections that would give us a chance to buy the second biggest cryptocurrency at a discount and make high profits to the upside. We believe ETH would be trading even higher in the next few years and there is a lot more money to be made to the upside.

By looking at the daily chart, one could see the first major support at $1960, which used to be a strong resistance level that was broken in the first week of April. The price is likely to retest that level to the downside where lots of buying pressure is expected to take place. The middle Bollinger band is right below that key support level, giving further bullish indications at that point. In fact, the RSI has formed a double top in the overbought territory and that is giving some indications for a potential short-term drop on the price that could easily send ETH towards the key support around $1960. In case the price breaks that support, it would be heading towards the next key support at $1850-$1860, followed by the third major support line at $1550-$1600 where lots of buying pressure has been taking place in the past few months and the price has been struggling to break that level to the downside.

Chart: ETH/USD


Based on its great network and applications, as well as the great expectations for the future, we believe Ethereum would continue rising in the middle to longer run. In other words, any corrections that could send the price towards the strong support marks we mentioned above would be giving us great entry levels for our buy positions. Therefore, we would be looking forward to adding ETH to our portfolio in the near future.

We would wait for a potential correction on the price and start buying ETH at around the first key support at $1960. In case the price drops further in the short-term we would then be interested in buying more aggressively at the next two major support lines at $1850-$1860 and $1550-$1600 where even more buying pressure is expected.
Our initial profit-taking target is set at $2250-$2300, followed by the next target at $2600-$3000 where we would be fully cashing in our profits and waiting for another potential correction that would give us a chance to own ETH again at a decent discount.


This image has an empty alt attribute; its file name is logo.svg

Add a comment