By
Bena Ilyas
April 22nd, 2024
Last week turned out to be quite positive for Bitcoin’s competitor and follower: Ether is trying to catch up with token’s #1 rally.
As a result, Bitcoin broke $10,000 barrier today, while Ether came close to $500. Both digital coins hit record highs, although Bitcoin demand has been much higher.
There are many cryptocurrencies that are close to their historical highs now. It looks like the market sentiment is euphoric, and this is something one could fear of.
Apart from the overall explosive growth of the demand for cryptocurrencies, the positive set of news for Ether includes the possible launch of derivative products. According to Bloomberg, such a possibility does exist, although neither the platform nor the sponsors are known.
Virtuoso could act as the platform in question, and if this is the case, then it would be regulated by the US’s CFTC. This is not the very best option for cryptocurrency futures or derivatives, but one has to start with something anyway.
If Ether derivatives does appear, the digital coin will get some serious market players, such as hedge funds. This would be great for Ether, which is now snailing after Bitcoin, failing to start growing independently.
Technically, Ether found resistance at $474-$475, which prevents the coin to rise further towards $500. MACD is signaling for correction, but as long as Bitcoin is rallying, there should be no stress for Ether either. Meanwhile, the ascending channel is still there, so before the correction takes place Ether could well rise to $540.
Ether support levels are set at $340 and $400, respectively. In case Bitcoin and, subsequently, Ether, run away from their highs, the sell-off could be large, summing up to 30% or 35% of the last growth period. Generally, this is quite common for cryptocurrencies to lose such a percentage of their value, with the main driver being market confidence and the lack of alternative investing options. As long as this is true, one has no grounds for fearing for digital coins.
Is it time to buy Ether while the growth rate is so high? Perhaps it is. However, you will have to adjust your position size anyway, so buying once the coin reaches one of the mentioned support levels could be a wiser move.
The sell-off target (if any sell-off is going to take place, which is still unknown) could be near $290, one of the local lows. This might be the case if such a sell-off will begin unexpectedly.