Is Ethereum set to regain its luster?
Tony Sycamore July 1, 2021 4:30 PM
The effect of ample liquidity remains obvious in equity, commodity, and bond markets. Not so in the digital asset space after falling sharply out of favour in mid-May, confronted by increased environmental and regulatory scrutiny.
The latest of which was Britain’s Financial Conduct Authority (FCA) who last weekend banned Binance Markets from undertaking “any regulated activity in the U.K.” It also stipulated that from June 30, Binance the world’s largest Crypto exchange must notify U.K. users of the FCA’s restrictions in a prominent place on its website and apps.
In weeks gone by, this might have sent digital asset prices into a tailspin. However, leading cryptocurrencies such as Bitcoin and Ethereum have rallied post the announcement. There is an old trading adage that when a market stops going down on bad news, it likely means a base is close by.
Ethereum has now enjoyed a run of five higher closes this week. Looking more closely into reasons why upgrades in the Ethereum network known as the “London” hard fork are expected to reduce energy usage and lower transaction fees as part of Ethereum Improvement Proposal (EIP) 1559.
Technically, following its impulsive rally from the March 2020 low near $88.20 to the 12th of May $4380 high, Ethereum commenced a pullback. The pullback neatly tagged uptrend support near $1700 in late June coming from the 2020 low and notably, the pullback unfolded in three waves, usually a good sign of a correction rather than an impulsive move lower.
Providing Ethereum holds above the $1730/00 support region and following its break above downtrend resistance on Tuesday at $2150, a positive bias is in place looking for the rally in Ethereum to extend towards $2900 in coming weeks.
Source Tradingview. The figures stated areas of the 1st of July 2021. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation
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