The Ethereum price is gaining bullish momentum above $4,000, as traders wager ETH will follow Bitcoins lead and set a new record soon. Ethereum (ETH/USD) is trading at $4,159, a 7-day increase of 15.34%, higher by 40% in October alone. As a result, the number-2 ranked crypto has reached a record market cap of $499 billion.
Ethereum has lagged Bitcoin’s performance recently as capital poured into BTC ahead of this week’s launch of the Proshares Bitcoin ETF (BITO). However, there is a growing belief that ETH will narrow the gap at the top of the crypto leaderboard. Recent reports from investment banks JP Morgan and USB revealed that Ethereum is gaining traction amongst institutional investors, predicting that ETH will outperform BTC over time. Furthermore, this weeks ‘historic’ ETF listing could pave the way for a similar Ethreum-linked product sometime in the future.
The daily chart shows several positive developments. Firstly, we see the Ethereum price is above the 50, 100 and 200-day moving averages. Also, if ETH ends the day above $4,160, it will make the highest ever daily close. In this event, bullish momentum should drive the price towards the May all-time high of $4,646. Furthermore, a solid finish to the week would indicate a breakout on the weekly chart, encouraging longer-term investors.
Despite the constructive technicals, the Etherum price has done a lot of work already, and just because BTC has reached a new high, there is no guarantee that ETH will do the same. Therefore, investors should exercise caution entering the market at this level. For now, the outlook is bullish, although, if Ethereum reverses below $4,000, it may encounter long liquidation. On that basis, a close below $4k invalidates the optimistic outlook.
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