In past week, Ethereum price saw a sharp increase of 66%. It surged from $83 to $138 amidst a strong corrective rally. It was triggered by oversold conditions and short contracts were squeezed out. This allowed the price of the asset to recover.
Good times for Ethereum?
Ethereum price is still down 91% from all-time high at $1,448. Even with a massive corrective rally, Ethereum and the rest of the cryptocurrency market are in a bear market and struggling to recover out of it.
A sudden breakout of major resistance levels can also leave an asset prone to large drops in the short-term. This is detrimental if it cannot be sustained with high volume.
Hsaka, a cryptocurrency technical analyst, suggests that Ethereum is a better asset to short. He attributes this to its high volatility and recent rally.
“Quite a substantial difference between the ETH and BTC structure. If you were betting on correlation remaining the same, and both reverting to structural equilibrium, $ETH seems to be the better play for shorts, and BTC for longs,”
the analyst said.
A crypto trader with the online alias “The Crypto Dog” explained that Bitcoin is facing several major resistance levels in the range of $4,000 to $6,000 .
The trader said:
$4,000 – $4,500 is major resistance and we could stall out soon. It’s also possible this could go higher, but I do not think it goes much higher than $5,400.
In the second half of December, Bitcoin, Ethereum, Bitcoin Cash, Ripple, and many crypto assets experienced relatively large gains against the U.S. dollar.
Can the market Sustain Momentum?
Bitcoin Cash price tripled from $75 to $238, and the price of Bitcoin surged from $3,210 to $4,000.
Major crypto assets are demonstrating strong daily volumes, with the daily volume of the crypto market surpassing $20 billion. If Bitcoin and Ethereum can sustain their volumes, small market cap cryptocurrencies are likely to follow the price trend of the two digital assets.
As Joseph Lubin, the co-founder of Ethereum, said:
I am calling the crypto bottom of 2018. This bottom is marked by an epic amount of fear, uncertainty, and doubt from our friends in the 4th and crypto-5th estates.