Ethereum has hit an all-time high but it looks like a retreat first and then a period of consolidation could occur.
Ethereum hit a high of $ 1,664 on Thursday, followed by a rally to just below $ 1,700 on several exchanges. The potential for the second largest cryptocurrency to reach $ 2,000 is still on the horizon, but every $ 100 level can be as difficult as it is on the road to $ 1,600.
According to Tim Enneking, managing director of Digital Capital Management, $ 1,600 could return to support but would break if not sustained. He added that the above resistance is much more difficult to predict. “On the way to breaking $ 1,600, every $ 100 was tough and it will almost certainly continue to be so,” Forbes added, adding that $ 2,000 would be a very strong resistance and if hit, it would follow a period of consolidation.
Similar to Bitcoin, Ethereum experienced a parabolic rise in 2020. After falling to $ 80 in March 2020, the price increased to $ 1,600 in just ten months. At the time of writing this news, the cryptocurrency has increased 31 percent in the last 30 days and 119 percent since the beginning of the year.
Ethereum is based on the numerous applications that developers have built on as the driving force of its value, given the narrative of Bitcoin’s rise as the digital version of gold. Almost all work related to decentralized finance or DeFi, which aims to eliminate intermediaries in financial transactions, is done on the Ethereum blockchain.
Increased interest in Ethereum has resulted in higher gas fees as transactions continue to clog the network. However, these gas fees are another reason why Ethereum is also valuable. Ethereum is the best risk / return investment game in cryptocurrency due to gas fees and decentralized finance, according to Fundstrat Global Advisors. At this point, the only possible risk seems to be delays in the blockchain transition to Ethereum 2.0 and a potential bear market.