Aside from crypto bellwether Bitcoin, Ethereum, the second-largest in terms of market capitalization, is another cryptocurrency that has become a prominent name in the space over the years.
In the course of the 2017 bull market, Ethereum (ETH) reached its all-time-high at over $1,400. The surge in price was mainly driven by the ICO craze, however, ETH growth has remained stagnant after the bubble burst and hype for the altcoin died down. In 2020, ETH has returned as a viable investment option due to major fundamental improvements and promising price development.
During the first quarter of 2020, ETH was well on its way to overtake Bitcoin (BTC) in terms of YTD returns. BTC experienced -11% returns during the first quarter while ETH only fell -0.2% during the same time period.
During the March 12th crypto bloodbath, the top two cryptocurrencies experienced similar nosedives in prices, where BTC went down 40% and ETH plunged 44%. Nevertheless, the prices rebounded shortly after the sharp drop and the crypto market has been climbing at a slow incline since. From the date of the swing-lows until today (April 20) BTC made a retrace of 89.5% while ETH flipped positive again with 102% recovery.
Looking at the numbers alone, you might observe that ETH was trending alongside BTC and even exhibited a healthier price development trend, as compared to BTC.
The major factor helping Ethereum to build a stronger foundation and diversify into new use cases has inarguably been the significant growth in Decentralized Finance (DeFi), which relies heavily on Ethereum’s blockchain and ETH locked up as collateral.
The value of ETH locked in DeFi protocols has been skyrocketing, thus reducing the availability of total ETH supply from the market and driving ETH prices up. Moreover, the daily transaction value of ETH is catching up with BTC. This indicates a substantial increase in activity on Ethereum’s blockchain.
Ethereum is also one of SCN30 Index’s constituents and plays a significant role, weighing at 20% of the total index value.
Learn more about SCN30 Index: https://scn30.supercryptonews.com/
ETH Price Analysis
ETH has recently broken above the red trendline and now is trending in an upward channel (yellow trendlines.) The short-term resistance lies at $189, breaking above it will send ETH to retest $212. The first support level is at $165 according to the Fibonacci retracement indicator.
After a flash crash to $89, ETH has been building up momentum, creating a series of higher lows. At the moment, ETH is also trading above both 89 and 200 EMA which indicates a strong bullish momentum as it continues to pave way to the upside.
BTC Price Analysis
Meanwhile, Bitcoin is still stuck in a trading range identified from our Market Analysis last week as we suggested taking profits at $7,000 and $7,200. As long as Bitcoin remains in this range, expected more of the sideways price actions.
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