The price of ether, ethereum's native token, is gaining altitude today.
At press time, the ether-U.S. dollar (ETH/USD) exchange rate is at $322. As per CoinMarketCap, ether has gained 6.8 percent in the last 24 hours. Week-on-week, the cryptocurrency is up 11.92 percent, while on a monthly basis, it is carrying 5.6 percent gain.
The rise indicates that ether could be finally putting an end to a near three-week-long consolidation that saw prices restricted to a trading range of $280–$312.
The rally is perhaps surprising news, since it arrives when ethereum is considering a possible system-wide software update following a serious vulnerability arising with the Parity wallet. The issue has seen over $150 million in ether frozen – including the funds for a number of ICO projects.
So far though, ether prices are showing no signs of stress on the news.
A possible explanation for ether's new bullish tone could be the rotation of money out of bitcoin and into other cryptocurrencies.
The lure of possible "free money" for bitcoin holders – should a split have occurred during the Segwit2x hard fork – has now disappeared, with the upgrade being suspended yesterday. With the news, unwinding of the "2x" bitcoin trades could gather pace as money moves into other digital assets.
For the time being, the price action analysis indicates better days may lie ahead for the ETH bulls.
Ether 4-hour chart
The above chart shows:
- Bollinger bands are squeezed, followed by a bullish break
- Bullish channel breakout
- Bullish relative strength index (RSI)
A Bollinger band squeeze occurs when volatility falls. A period of low volatility is usually followed by a period of high volatility/big moves on either side.
On the chart above, the period of low volatility (narrow range) ended with an upside breakout yesterday.
The good news doesn't end there. The price chart also shows a bullish channel breakout or the upside break of the consolidation. That has opened doors for a rally to $350 levels (target as per the measured height method).
- ETH looks set to re-test $345 (Oct. 13 high)and $350 (Oct. 16 high) over the next couple of weeks.
- On the downside, only an end-of-day close below $300 would signal a bearish trend reversal.
Climber image via Shutterstock