Price analysis as Ethereum consolidates below $150

Trading
December 17, 2019

Fundamentals

ConsenSys, the ethereum blockchain development company, issued an “Ethereum by the Numbers – The Year of 2019” report, showing network activity, status, DeFi analytics, figures etc. Below you will see the major takeaways from the report:

  • 20m+ total Ethereum accounts created this year
  • 4 million new active Ethereum addresses in 2019
  • 8,516 live Ethereum nodes
  • 520 new Dapps created in 2019
  • 55 million Dai
  • 25k+ developers

Elsewhere, it was announced a few days ago that Fidelity Digital Assets, a cryptocurrency trading arm of the financial giant Fidelity, may start supporting Ethereum in 2020. So far, the company has supported only Bitcoin. 

The company’s President, Tom Jessop, hinted that Fidelity Digital Assets may soon start offering custody for the world’s second biggest digital currency due to increasing demand from the side of investors. In addition, he stated that it takes more time for institutions than individuals to decide on a particular investment. 

The company will soon celebrate its first anniversary as it moves into the second year of offering cryptocurrency custody and trading tools for institutional investors and traders. Last month, Fidelity Digital Assets announced it has successfully obtained a license from New York state to operate a trust.

Back then, Jessop said that there is a growing demand for cryptocurrency products. 

"We've had more inquiries that are the pension and endowment type," said Jessop while adding that he expects around 30% of the clients to be of a non-crypto background. 

In the meantime, Vitalik Buterin confirmed that the Ethereum Foundation sold 70,000 ETH “basically at the top” to capitalise on the market price. Judging by his comments, the Foundation netted around $100 million by selling ETH. 

“I did get the Ethereum Foundation to sell 70,000 ETH like basically at the top and that’s doubled our runway now,” said Buterin while adding that this proved to be a “good decision that had a lot of impact”.

Ethereum hit an all-time high of $1424 on January 13, 2018. The Ethereum price trades below $150 today. 

Speaking on other subjects, Buterin said that he doesn’t belong to a camp which believes that cryptocurrency will destroy fiat currencies and replace them. Instead, he pointed that out that two systems can coexist together peacefully. Hence, crypto should be seen as “checks and balances” against a government monopoly on issuing currencies. 

Technicals

Ethereum has followed Bitcoin in taking a step lower from the levels it experienced last week. As seen in the price chart below, the price action is now trading comfortably below $150, which is an important bull/bear horizontal line. Ethereum is currently testing the 78.6% Fibonacci retracement, which sits at $142. The ultimate Fibonacci retracement - 88.6% - is located at $113.



ETH/USD daily chart (TradingView)
ETH/USD daily chart (TradingView)


On the daily chart, the price action has been continuously creating lower highs as the bearish momentum continues to build. The 8-month low of $133 is the initial target for the bears, while the descending trend line that connects recent swing lows comes around the $125 handle. In between this zone and the psychologically-important $100 handle, there is the aforementioned 88.6% Fibonacci retracement at $113.. 

On the upside, the $150 remains the first level of resistance for bulls. If broken, the 100-DMA is expected to apply pressure on bulls at $174. However, a technical perspective points to lower levels for Ethereum in the short-term.

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