Ethereum price was rising steadily before and during the Byzantium fork. It even managed to touch the 350 USD level. Since then, it dropped briefly below 300 to touch a low of 287 USD. Even with this recent drop, we maintain a Bullish stance on Ethereum price, even with the recent price movement. Here is why.
First and foremost, the Chart setup
Ethereum price has been steadily making higher lows, even in its recent drop, it managed to bounce right off the diagonal dark blue support line. This shows investors and traders showed up and picked up Ether at what they believe was a decent entry.
The chart below also shows that after falling off the ascending channel, Ether price quickly found support around the dark blue line and so far, that line is holding.
But what exactly is happening with Ethereum price, and in fact, what is happening with the sector in general?
Ethereum price and the Cryptocurrency sector Under pressure
This 3rd week of October was a notable one for Ethereum and Cryptocurrencies. The week was full of announcements and multiple positive catalysts for different Cryptocurrencies:
- Ethereum’s successful Byzantium upgrade, increasing anonymity, security and fast transactions.
- Ripple securing a collaboration with the Gates association to work on mobile payments.
- Bitcoin less likely to fork since major miners and coutries rejecting the segwit2x hard fork.
These are all important upgrades and collaborations that should boost the price and intrinsic value of these Cryptocurrencies and positively impact the sector in general.
Instead, we are mostly hearing about concerns that the sector might get crushed due to ICO bans, rumors of regulations, Russia’s Cryptoruble and that they might ban all other Cryptocurrencies. Of course, most of these concerns were shared on the usual traditional Media outlets.
For Ethereum particularly, the sell off yesterday was in part triggered by Gavin Wood’s comment of how Ethereum’s upgrade was deployed but issues could take days or even weeks to arise. We have covered these factors in details in our Ethereum price after a smooth and successful Byzantium fork.
In our Ethereum price Outlook 2 hours before the Byzantium fork, and when the price was around 340 to 350 USD, we shared the following with our readers:
Scenario # 1 The classic buy the rumor, sell the news scenario
This is a very likely possibility. When you think that some traders are up by more than 40% since the last major dip, it is hard to rule out profit taking. Should this happen, we will see a correction following the announcement of the successful Ethereum Byzantium fork. After a healthy correction, Ethereum will resume what could be a solid uptrend.
And that’s what we are seeing today. With some traders exiting and securing profits, we have seen a short selloff and the price bounced right off the support line. We do expect some more volatility and probably further pressure on Ethereum and Cryptocurrencies prices especially that we might be hearing soon about the Chinese stance on Bitcoin after their congress meeting that is happening at press time.
Ethereum Price, what’s next?
All in all, this recent price action, including the drop below the 300 USD for Ethereum price is not a concern. In fact it is a healthy retrace. Moving forward, the price might face again a stiff resistance at the 325 USD level again. If that happens, it will send the price again to the purple channel and we might see a sideways action till 325 USD is broken to the upside again. Our overall outlook remains bullish as Byzantium is a meaningful upgrade and the enhancement it adds to Ethereum are fundamental to its intrinsic value. Therefore, a solid upwards move is not ruled out for Ethereum.
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