Ethereum had an impressive week, jumping above $1,400 to break through several levels of resistance and suggesting the start of a bullish trend. Unsurprisingly, the cryptocurrency’s price movements have widely drawn the attention of investors and analysts, particularly as it approaches significant technical milestones on its chart. After the news hit Wednesday, Ethereum rocketed close to 7%. Its growing performance continues to make waves in the broader cryptocurrency market. This article takes a look at the two key dynamics behind Ethereum’s recent bullish price action. More importantly, it highlights what these changes should mean for the immediate future.
Ethereum's Price Momentum
On Wednesday, Ethereum’s price soared close to 7% to break above $1,900, a sign of bullish movement dominance in the market. This swift rise provided Ethereum the momentum to rally in support of its 50-day Exponential Moving Average (EMA), located at $2,445. The 50-day EMA is one of the most closely watched indicators, as it’s considered a good gauge for many traders of what the overall trend is.
Most importantly, Ethereum was able to close above the daily resistance at $2,461. Today’s close above the former resistance will now act as bullish momentum. It indicates that buyers are becoming more powerful and will move the price upwards. The rally persisted into the following day, with Ethereum continuing to make gains but at a slower rate.
As of Friday Ethereum has cooled off some, trading at the $2,500 price level, a healthy consolidation of gains made earlier in the week. This level is important psychologically and would likely serve as a long-term fulcrum point for any future moves in price. For the bulls, the ability to hold this level will be a welcome sign of further bullish continuation.
Technical Indicators and Market Sentiment
From a technical perspective, we can glean some useful information to help us understand Ethereum’s likely path ahead. Last week, a bullish crossover was confirmed on Ethereum’s daily Moving Average Convergence Divergence (MACD) chart. This is when the MACD line crosses above the signal line, frequently seen as a bullish indicator or buy signal.
The bullish crossover on the MACD is another signal indicating that upward momentum in Ethereum’s price will persist. The MACD is one of the most popular technical indicators for traders looking to find potential short and long-term trends and overall strength of a price movement. Today’s reading lends credibility to the view that Ethereum’s recent rally is more than a flash-in-the-pan aberration.
Another important factor when it comes to Ethereum price action is market sentiment. Positive developments, technological improvements, and the rush towards widespread adoption are all helping to create a bullish scenario. Alternatively, news of regulatory pushback or negative press inciting fear can quash this excitement and significantly reverse the price gains. The overall sentiment is cautiously optimistic at this point. Ethereum has managed to break through significant resistance levels and there are several bullish technical signals contributing to this excitement.
Ethereum's Unique Position in the Crypto Ecosystem
Ethereum’s almost singular position as the blockchain and currency of choice for Smart Contracts has created an aura of value and stability around it. Ethereum is unique among altcoins—not just because it’s popular—but because Ethereum is a fundamental cryptocurrency. It is second only to Bitcoin in market cap and influence. This importance is due in part to its status as the main decorative fork point.
In the world of cryptocurrencies, forking describes a division of the blockchain. This division creates two different forks of the currency. Ethereum, along with Bitcoin, is one of the two cryptocurrencies from which forking almost regularly takes place. This distinction emphasizes just how important and resilient it is—one of the rarest resplendent of the crypto space.
The Ethereum network's ability to support a wide range of decentralized applications (dApps) and smart contracts further solidifies its position. This functionality is the reason Ethereum now serves as a global hub of innovation and development, home to a massive community of developers and users.
