Ethereum Price Clinched a New High – Still in Accumulation Mode

Summary:

Ethereum price rose to a new high yesterday, moving above a key resistance level. Accumulation and distribution indicator suggests that $500 is now possible

Ethereum price (ETHUSD) made a major breakout yesterday, as the price moved above the important resistance of $443. The second-biggest digital currency is trading at $460, which is slightly below yesterday’s high of $470. Bitcoin price, on the other hand, is down by 1.65% while Ripple is down by 0.23% in the past 24 hours.

Several factors support Ethereum uptrend

There are several factors that have pushed Ethereum price to its highest level in several years. For one, the weaker US dollar has helped investors buy assets like Bitcoin, gold, and silver. Although the US dollar is gaining today, it has been in a steep downward trend in the past few months. Indeed, the dollar index is trading near the lowest level in several years.

Second, Ethereum has jumped because of the rising growth of Decentralised Finance (DeFI). For starters, this is a relatively new industry that allows people to build financial solutions using blockchain technology. Today, there are hundreds of DeFi products and the value they hold is more than $9 billion. In contrast, the industry had less than $1 billion in January. And, new data shows that trading volume on decentralised exchanges has recently jumped to more than $11 billion.

Third, ETH 2.0, which is a major update to Ethereum’s system has helped fuel demand for Ethers. That is because traders believe that it will lead to more stability and faster speed in the industry.

Ethereum price technical outlook

Technical factors have also been positive for Ethereum price. The daily chart shows that the ETHUSD has been in a strong upward trend since bottoming at $97 in March. The price reached a high of $445 in August. It then attempted to drop but faced strong support at $371. And yesterday, the price moved above the August high of $445. Most importantly, the price is above the 50-day and 100-day exponential moving averages.

Also, the accumulation/distribution indicator has jumped to its highest level this year. Therefore, I suspect that the price will continue rising as the accumulation phase continues. If it does, the next resistance level to watch will be $500. On the flip side, a move below the previous support of $371 will invalidate this trend.