The price of Ethereum has been on the rise since the start of October. A plethora of reasons lie behind the altcoin’s price increase, one of which is the move to Ethereum 2.0, expected next year. But Ethereum’s bullish run in the last weeks is only just the beginning; there is more to come. Ethereum’s price reached $4,200, and predictions are that it’ll reach more highs before the end of the year.
As October wound to a close, the cryptocurrency space was awash with hopes and excitement as Ethereum hit an all-time high of $4,400, and the ceiling, which was once a floor for resistance, was broken several times, even with moments of dips in the market.
Ethereum, In October, Broke the Bearish Trendline, Attaining New Highs
In September, Ethereum was struggling to stay in the $4,000 range, with China’s announcement of a crypto ban causing a negative effect on the market. But the market started to pick up steam in the late days of September, and the upward trend continued in October. The trendline for Ethereum was at a high of $4,030, which was the ceiling for many investors and traders – especially those trading on Ethereum futures. But October came with a bullish run so massive – well, not as massive as bitcoin’s bull run, which saw the number one cryptocurrency gain as much as 30% in October – that the ceiling price of September was soon the floor price, the resistance level. People bought bitcoin more during October, with stats recording high on-chain transactions.
In May, Ethereum hit a record high of $4,400 on Redot.com, and the market trends show that this high will be achieved, and even surpassed in the coming weeks.
Technical analysis, using the Relative Strength Index, from professional traders and analysts reveals that there was an overbought.
An overbought phenomenon in cryptocurrency happens when a cryptocurrency is being sold higher than its perceived value. In an overbought, traders and investors rush in to the market, buying Ethereum and bitcoin and other altcoins and meme-coins at prices above the market’s evaluation.
An overbought trend often looks good to traders who had bought the coin at market price, but the possibility of the trend reversing is deadly. In a reversed trend, the price will plummet so bad, leading to an oversold.
Now, for the price of Ethereum rising so high as to flip the September ceiling price, it means the market might continue on the upward trend and even surpass the All-time high reached in May.
WHY HAS THE BULLISHNESS OF ETHEREUM CONTINUED?
The cryptocurrency space lives and breathes on trends, good or bad news, and a host of other market sentiments. It is not out of place for traders and investors worldwide to get into a frenzy when good news surfaces or panic sells when there is bad news.
When the Chinese government banned all forms of cryptocurrency activity in China, the bitcoin and Ethereum markets suffered heavily. The price of the two biggest cryptocurrencies, based on market capitalization, experienced slumps in prices.
However, in that period where bitcoin and Ethereum were suffering heavily because of the market’s sentiment, other altcoins and shitcoins were doing well, gaining hundreds of percentages in the market.
The market retraced after the brief dip period, and since then – from the first day in October – the uptrend has continued.
Yes, there were ups and downs within the weeks, but bitcoin and Ethereum, at the end of October, closed with weeks of above $60,000 and $4,000 respectively.
The market’s sentiment is being heightened because the United States Securities and Exchange Commission (SEC) was having several meetings with Bitcoin ETF companies.
The clamor for bitcoin ETF has been on the table for years – eight years precisely. But the SEC had been reluctant to approve the Bitcoin ETF because of the volatility of the cryptocurrency market and the lack of a regulatory body in the space.
The SEC had been meaning to get involved with cryptocurrency and act as the regulatory body to monitor the market and regulate the prices of the major cryptocurrencies – mainly Bitcoin and Ethereum.
A regulatory body in the cryptocurrency space will provide investors protection against price volatility, and thus encourage more people to get involved in cryptocurrency. Also, with the SEC involved, playing the big brother role, gains traders get would be taxed, therefore increasing the US revenues.
However, traders and investors have vehemently opposed the involvement of the SEC in cryptocurrency because they fear their involvement will stifle the space’s growth and take power off the hands of the people.
Market sentiments have increased over the possible announcement of the Bitcoin ETF by the SEC.
Why is there increased hope?
The chair of the Securities and Exchange Commission Gary Gensler said that four companies filed for bitcoin ETF with the SEC under the Investment Company Act of 1940. The act allows the SEC to regulate these bitcoin ETF companies, thereby giving the SEC some level of control over how their market operates.
If the Securities and Exchange Commission allows the formation of bitcoin ETF, then more investors will get into the cryptocurrency market and the price will increase and adoption increase as well.
In light of the SEC approving bitcoin ETFs, institutions, big money companies, hedge funds, investment giants and banks are also buying bitcoins.
The involvement of these big-money players in cryptocurrency is raising the hopes of investors and traders. As the excitement swells, the price will increase. And given the popularity of NFTs, digital arts built mainly on the Ethereum blockchain, the price of Ethereum looks like going past its all-time high.
In 2022, Ethereum will move to a new blockchain, one that uses proof of stake, moving away from proof of work, a system that uses a lot of energy.
The growth of cryptocurrency and its adoption means that the prices of cryptocurrencies will increase in the future. As more institutions adopt bitcoin, more businesses accept bitcoin as payment, the digital currency revolution will sweep through the world and redefine what we know about money.