Key Ethereum takeaways
- Ethereum (ETH / USD) appears poised to follow an uptrend towards USD 2,000 after turning key resistance levels into interim support.
- Further tailwinds come from the latest recommendations from Citi and Goldman Sachs for the cryptocurrency sector.
- The volatility in the US Treasury market continues to pose risks to the rally.
Ethereum prices rose Wednesday, turning a number of key resistance levels into supports as the bulls eyed a prolonged spike to $ 2,000.
The second largest cryptocurrency after Bitcoin topped $ 1,475, a level that prevented ETH / USD from extending its uptrend throughout January. As the pair broke the price cap and flipped into support zone in February, Ethereum surpassed the $ 2,000 mark and plunged below $ 1,475 on an impending downward correction that later followed.
Establishing Ethereum trading, as highlighted Cactus. Source: ETHUSD on TradingView.com
In the first week of March, Ethereum flipped the price cap again, followed by a lengthy move towards the next resistance level at $ 1,750. The uptrend in the cryptocurrency on Wednesday also caused it to surpass $ 1,600. This was a psychological support that was the reason for moving up to a higher level.
“[I’m] We expect a new test of $ 1,750 today and that $ 1,600 will flow back into support, ”said a pseudonymous analyst on Twitter. “The previous wick high from the previous range of $ 1,475 is again serving as support.”
The crypto boom continues
Further bullish tailwinds for Ethereum can be traced back to recent recommendations from Goldman Sachs and Citigroup. Reuters reported Monday that Goldman plans to set up a cryptocurrency trading desk three years after its closure. The report suggested that the bank would roll out bitcoin futures services on its platform by mid-March.
According to Correlation Watch, the correlation efficiency between Bitcoin and Ethereum is 0.88. This means that Ethereum tends to positively track Bitcoin’s price development, making it possible for it to rise alongside the world’s leading cryptocurrency as its adoption among institutional investors is booming via Goldman.
Citigroup sees the cryptocurrency sector the same way overall. In a report released Tuesday, the global banking giant’s Global Perspectives and Solutions think tank stated that Bitcoin could become “the currency of choice for international trade.” The BTC / USD exchange rate surged over $ 51,000 a day after the report was released.
“I wouldn’t be surprised if [Ethereum] It didn’t start from here, ”said an independent analyst after the token’s rally on Wednesday. “I don’t want it to go up yet. Gambling: I’ll consider longing for a breakout above 1794 and aiming for> $ 2,000. I think it’s bottomed out, but I don’t want FOMO. “
Risks ahead of the Ethereum rally
So far, factors that could stop the ongoing cryptocurrency rally have been affecting US bond yields. Last week, the rise in 10-year US Treasury bond rates reduced investors’ appetites for riskier assets as they looked for cash. This pushed tech stocks Bitcoin and Ethereum down.
Should the Federal Reserve allow the bond sell-off to continue, Ethereum could remain at risk of a correction.