Published
5 years ago on
January 24, 2019
Ethereum (ETH) is trading just above its 61.8% Fib extension level but the price has currently faced a strong rejection at a trend line resistance. The 4H chart for ETH/USD shows the price trading in a falling wedge that has a higher probability of breaking to the upside than the downside. That being said, the next definitive direction that Ethereum (ETH) takes will depend on the future outlook of Bitcoin (BTC). If Bitcoin (BTC) rises, ETH/USD will rise a lot more aggressively and if Bitcoin (BTC) falls, ETH/USD is likely to fall a lot more even though it appears to have already bottomed. RSI for the 4H chart shows a bullish divergence which is why Ethereum (ETH) is still a strong buy at current levels despite the prevalent uncertainty.
The trading volume has also fallen sharply the past few days which means that a few big players could swing the price either way. We witnessed similar events during the past few days when the price plunged aggressively in a matter of seconds but soon recovered as a lot of people are eager to buy at current levels. The number of people who are willing to sell their cryptocurrencies at this point at current prices is quite low because most cryptocurrencies at this point have already went through more than 95% correction and honestly things could not get much worse from here. The price could decline another 5% or more but the fact remains that Ethereum (ETH) has either bottomed out or is very close to finding a bottom.
Chart for ETH/BTC (1D)
The future outlook of Ethereum (ETH) compared to other cryptocurrencies is not as bright as before in terms of growth. From an investment standpoint, cryptocurrency investors could expect to gain a lot more investing in medium or small cap coins compared to Ethereum (ETH). However, it is also true that Ethereum (ETH) has gone through a lot of development and is now very close to delivering a working product. During the last few years, we saw a lot of new ICOs launch on the Ethereum blockchain but that is not its real use.
As the trend shifts towards STOs or other platforms like Stellar begin to trade Ethereum (ETH)’s monopoly in the fundraising space, we could see Ethereum (ETH) cede space to its competitor. Thus, it may not have enough room to rise as much as its competitors but it is likely to deliver a working product a lot sooner than any of them. It is also more likely to be adopted by big corporations like Microsoft, Google or Amazon for use in their own products and services. As institutional investors begin to enter this space, they are going to be more comfortable investing in Ethereum (ETH) instead of its competitors. This is because Ethereum (ETH) despite all its flaws has been through a very rigorous process and has a large support base which still makes it a very lucrative investment from a risk/reward standpoint.
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