ETHEREUM RIDES THE POSITIVE NEWS WAVE
Over the past five days, the price of Ether was up by more than 18%. While this rapid surge has eased, Ether is still up by 10%
The increase has been attributed to positive news. On Tuesday, Blackrock – one of the largest asset managers in the world – announced that it would start exploring cryptocurrencies. Traders believe that this will increase demand as other asset management firms take interest in the crypto sector.
In addition, the new Goldman Sachs CEO is known to favour cryptocurrencies. This is in contrast to the cautious views of former CEO Lloyd Blankfein. The hope is that other large banks will start taking cryptocurrencies seriously too with Goldman’s lead.
Yesterday, Jeremy Allaire – CEO of fintech start-up Circle – was interviewed by CNBC about Ether. In the interview, he talked positively about Ethereum and the technology behind it stating:
‘One of the things that really catalyzed the [cryptocurrency] market last year was actually that Ethereum, in particular, kind of got to a place where you could build apps on top of it. You could issue new tokens on top of it; you could create new kinds of financial contracts, using the smart contracts technology.’
His view is widely recognized in the cryptocurrency industry where many traders compare Ether to Bitcoin. The two are fundamentally different products. On one hand, Bitcoin was created to substitute fiat currencies. On the other hand, Ether was created as a decentralized product for building applications by smart contract technology.
The ETH/USD pair is now trading at $466, which is above the multi-weekly low of $416. This price is also lower than the weekly high of $506 and is in line with the 50 and 100-day exponential Moving Average. As shown below, early this month, the ETH/USD pair crossed an important resistance level and has managed to stay above it. In light of positive news, the pair could reach the important resistance level of $535. Still, traders should be cautious about a downturn because, in the past, positive expectations on demand have not materialized into real action.