Ethereum (ETH) Bounces Back To Begin Rally Towards $200 Again

Ethereum (ETH) Bounces Back To Begin Rally Towards $200 Again

Ethereum (ETH) fell back to the bottom of the descending channel and has now started a new rally. Contrary to the expectations of many speculators, ETH/USD did not fall to $100 as buyers started accumulating aggressively around $103. There are still plenty of investors in the market who would once have been happy to see the price retrace to $500 so they can buy, but now they are waiting for that even $100 to be hit again before they buy. How and why they think that way, I cannot begin to fathom. Meanwhile, smart money has been busy accumulating at these levels. The outlook of Ethereum (ETH) today is a lot better than it was the last time Ethereum (ETH) was priced this low. This is a strong reason in itself to be long on this coin.

Critics of Ethereum (ETH) may say that Ethereum (ETH) has a lot of problems and that the price will take a long time to reach anywhere close to its previous all time high. All of that may be true, but the fact remains that everything has a price. Even if you do not believe in the long term future of Ethereum (ETH) for 5 to 10 years from now, you still cannot deny that it is a bargain at current prices. The availability, liquidity, and ease of storage make this decision a lot easier for investors who are looking to add top performing coins to their digital assets portfolios. Now, one thing is clear though that Ethereum (ETH) may not see a similar influx of new ICOs again. This means that the platform coin will have to find other ways to preserve its value proposition.

Chart for ETH/BTC (1D)

From a technical standpoint, Ethereum (ETH) is currently a buy from every angle. The price has reached a new low for the year; the RSI has bottomed out on the weekly and the daily time frames. ICO projects that had raised funds via ETH have mostly dumped their coins by now. If anything, new ICOs that are going to raise funds via ETH are expected to drive up demand for Ethereum (ETH) once again. However, as aforementioned, this way of raising money for new projects is likely to change soon with the introduction of security tokens. It is likely that platforms like Polymath will eventually become facilitators in this space and Ethereum (ETH) may not have the same influence over this space as it once did. That being said, there are still a lot of Dapps built on Ethereum (ETH) and they have no intention of leaving the Ethereum (ETH) blockchain anytime soon.

Encouraging new companies to hold ICOs on your blockchain could be a good thing. As we saw, it gave a big boost to Ethereum (ETH) and made it the second largest coin by market cap. However, allowing all shady projects to raise funds via the Ethereum (ETH) blockchain just because they are buying a ton of ETH comes with its problems. Ethereum (ETH) has been in trouble over its connection with ICOs in the past. This time the situation could be a lot more complicated as the recent bloodbath has stripped most ICOs out of funds they need to build and run their businesses. When their investors take them to court, Ethereum (ETH) could get dragged into it. This is currently the biggest risk factor for investing in Ethereum (ETH), but on a longer time frame we believe that the rewards outweigh these risks.

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