Ethereum price (ETHUSD) is rising today as the positive momentum in digital assets continue. The second-biggest digital currency is trading at $380, which is substantially higher than October’s low of $332.
Cryptocurrencies have been in a strong upward trend recently. Just yesterday, Bitcoin price rose to above $12,000 for the first time in months. This surge has pushed their total market cap to more than $372 billion.
There are several reasons why this rally has happened. First, the US dollar index has been in a strong downward trend and is now at the lowest level in more than a month. It is down by more than 0.30%.
A weaker dollar is usually a positive thing for assets that trade in the currency like digital currencies, American stocks, and commodities like gold and silver. That is because it makes the assets more affordable than when the dollar is strong.
Second, more companies have continued to shift their resources to digital assets. Two months ago, a company known as MicroStrategy announced that it was buying cryptocurrencies worth more than $250 million. And recently, Square bought cryptocurrencies worth more than $50 million. This week, Mode, a company that is traded in the FTSE announced that it will hold 10% of its cash in Bitcoin.
While no company has expressed its intention to shift to Ethereum, analysts believe that some will consider it because of its role as the second-biggest cryptocurrency in the world.
Ethereum price is also rising as the DeFi industry continues to grind. According to DeFi Pulse, the total value locked in the industry has soared to more than $11.27 billion. This is a significant gain considering that the industry was worth less than $1 billion in January this year. Here is a quick explanation of what DeFi is:
On the four-hour chart, we see that Ethereum price reached a high of $395 on October 12. It then gave up those gains and dropped to $361 on October 16. Now, the price is attempting to recover those losses and has moved above the 25-day and 15-day exponential moving averages. It is also along the 38.2% Fibonacci retracement level.
Therefore, I suspect that the price will continue rising as bulls attempt to move above $400. But to do this, they will need to move above the resistance level at $395. On the flip side, a move below the support of $361 will invalidate this trend.
