ETH HITS ATH AGAIN & TOTAL CRYPTO MARKET CAP SURPASSES $3T
Ethereum (ETH/USDT) hit its all-time high again on Monday the 8th of November to start the second week of a traditionally strong month in the world of crypto. Previous ATH levels were broken on the 21st of October, albeit only by a few dollars ($4375), then much more decisively on the 29th of Oct ($4460) followed by a new record just three days into this month ($4665) and that level has finally been left behind as well when the second largest crypto-asset (current market cap: $573B) was traded for as high as $4804 during a yesterday’s session.
Meanwhile Bitcoin (BTC/USDT) in spite of an increase by almost 11% from its Saturday’s intraday low of $60k all the way up to $66.5k has been struggling to set a new record valuation so far which must be a little worrying not solely for BTC investors, but also for anybody who owns any tokens because a higher high for bitcoin should be seen at this point almost necessary in order to fully keep the crypto market’s momentum intact. Hopefully the King of all cryptocurrencies will have achieved that target soon and possibly by the time this article gets published.
In other news, the total market cap of all crypto as a whole has just surpassed a whooping 3 Trillion USD, quite a spectacular achievement in itself and Ethereum is currently responsible for 18.6% of that amount with Bitcoin dominance at 41.3%. Ether remains a higher yielding investment than the Numero Uno for the third consecutive week, from the day when it was at its lowest ratio to BTC since late July. Three weeks ago it bounced off the support dating back to the 23rd of this past May, from 0.06 BTC all the way up to 0.075 BTC but it didn’t turn out to have enough strenght to breach this crucial resistance so far leaving two rather grim looking long wicks on the daily ETH/BTC chart. That level in my mind is a very important target and potentially breaking it would have to be considered yet another confirmation of ETH’s likely farther movement to the upside in the coming weeks.
Last week we wrote extensively on Ethereum’s historical first week as a deflationary asset (more details here) and while that’s no longer a case with 85.5k ETH burnt compared to 94k new ETH mined over the recent 7-day period, the token’s inflation is still ELEVEN times lower than what it used to be before EIP-1559 was implemented back in August, representing a net reduction by enormous 91%. We will deal with ETH’s on-chain data in the very next article on the asset, but in short, there are no reasons to worry about the potential sell-off from the whales soon, if anything, these big players seem happy to keep buying more of the coins at the current prices contributing more and more to the upcoming huge supply shock.
Things are looking pretty bullish for the second biggest crypto wherever we look so far. Okay, the high and rising gas fees could admittedly be an issue preventing many new, especially smaller-time investors from hopping on the Ethereum bandwagon and they should be monitored closely in the coming weeks. Now that’s out of the way let’s move on to the charts to look for any red or green flags there, shall we?
TECHNICAL ANALYSIS
ETH (ETH/USDT) has just broken a key area of local resistance slightly above the $4600 mark that prevented it from going higher at the beginning of the month and that level should be considered our immediate area of support for the time being. Looking at the 4-HR chart ETH’s price has been on an uptrend for nearly a month trading pretty much within a steady rising channel. Currently we are testing the upper trendline of that one month old pattern and we should be prepared for an immediate possible correction lasting 2-4 days based on three and arguably four almost identical instances which occured over the recent four weeks.
Whenever the RSI touched or went above 70, the price had a small dip between 7 and 10% within a few days that followed. If that’s the case again, we should expect Ether to test the lower trendline at approximately $4600 and a bounce off that level should then start another leg up this time taking the price up to as high as the psychologically very important round number of $5000. Another reason that leads me to predict an immediate pull-back is the decreasing volume clearly visible on the daily chart – any uptrend that is not backed by the increasing dollar values of trading is likely to reverse sooner rather than later.
Obviously if ETH does manage to decisively break above the upper trendline of the channel, that will be a massively bullish signal pointing to a possible immediate attempt to break the $5k barrier without testing the lower trendline or the $4600 again first. As for the mid-term, things are looking pretty great except for the Fear & Greed Index which is signalling Extreme Greed at 84 or 86/100 depending on a source. So, if you are an investor, you should be keeping your fingers crossed that we do get a few days of a cool-off in price. Next week more on the mid and long term plus some on-chain analysis so stay tuned to cryptodaily.
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