Can Ethereum Bulls Take $550?

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Ethereum has been rising, and with its rise it appears to be dragging other cryptos up. Some of these other cryptos got a bit too excited that cool eth might be back in the game. Some, like bitcoin, were acting like stuffy grandpas annoyed by all these kids making noises.

Ethereum, in turn, has been seemingly dragged up by its many revolving planets/eth based projects. Because if we are going to construct a narrative, as we are because someone has to, then we can say this all begun on or around 27th of March.

On that day Coinbase announced support for ERC20 tokens. The market quickly settled on BAT as the likely next candidate. BAT jumped 20%.

After four months of selling, one could finally see a little bit of green in the above events. Yet with the despair phase at full strength, few believed. So bears sold a bit more, then 10 days of sideways followed.

That’s the longest sidewaying period ethereum has seen as far as one can recall from memory. And in that period other things happened. DGX launched, Dai proved itself, Golem launched. Bulls finally saw hope of green.

And of course all this has a lot to do with eth because firstly some of the projects use eth in some way and pretty much all of them can be bought primarily only through eth. So we get a higher low.

Ethereum’s price on daily candles.

The above chart is interesting for many reasons. First, one could see a cup and handle if they want to look hard enough. Second, the last two one day candles are curious.

But, the main thing it probably tells us is that ethereum now faces some significant resistance. That’s because ethereum’s price stood at around $550 for some eight days.

That doesn’t mean it will necessarily do so again in the way up. Eth is a moody kid with a mind of its own and full of surprises, but can it cross $550?

We obviously have no clue, but the 6 hourly eth candles look interesting and show more clearly what looks like a cup and handle. If it is, then it might re-take $550 and it might do so very quickly.

Ethereum’s price on 6 hours candles (6h).

Yet if price predictions were that easy we’d be billionaires rather than writing here, so the opposite might happen.

Let’s then look at something else to weigh the probabilities. Ethereum transactions. They have risen above 700,000 for the first time since early March.

Ethereum transactions.

One could say these transactions are faked, but it would require a great mastermind and a super-conspiracy to fake them so closely in line with unpredictable price movements.

So we’ll default to rational thought and assume that since more people are buying, and thus are holding eth, more are transacting, or moving eth around.

That probably does mean there are now as many people as in March holding eth, but it doesn’t necessarily mean they are holding the same amount as they held back then.

And it doesn’t necessarily mean so because price in early March was at $800. Yet, one could say there might be a delay in the price’s reaction especially if that cup and handle does go on to do what textbooks say.

And just in case you were not satisfied with our reading of tea leafs so far (just be happy we’re not talking about moon cycles), let’s look at another interesting but stupendously speculative chart.

Eth, long term price super-speculation.

Now this is the rainbow chart. Extrapolating from previous price movements potential future movements and claiming with those colorful lines when it’s a good buy and when it’s probably the top.

The rainbow chart is a classic for bitcoin, often shown in the early days (2013), but it’s one of the first we see for eth and we haven’t checked any bit of it at all because it’s complete speculation.

But another way to speak of speculation is probabilities. What are the probabilities eth would rise to the same market cap of bitcoin at its all-time high (ATH), for example, which was around $300 billion, giving eth a price of around $3,000?

A more interesting question is what are the probabilities eth’s market cap would rise to $2 trillion, giving it a price of around $20,000, same as bitcoin’s price at ATH?

That’s not a scientific or a real question so we don’t have an answer, but if the probability is guessed at say 50%, and price is now $500, that means a one in two chance of gaining $2,500 in regards to the first question or some $19,000 in regards to the second, just as there’s a one in two chance you’ll lose probably not all of it, but as a $100 eth isn’t inconceivable due to black swans, then you might lose $400.

Then, if you’re going to be pseuduo-scientific, or at least have some base for making decisions, you can do the same sort of evaluation regarding a certain stock, and then decide where your $500 might take you further, by how much further, and how sure are you of it, just as how much risk you’d rather take.

Because, at the end of it, that’s the game in all things money, risk and risk management in light of the opportunities. Whether starting a company or continuing to run a company or keeping a job or keeping a stock or a gold coin, you have to guess – hopefully in a somewhat informed way but never in a fully informed way – just what action to take.

And the guess here, regarding the title question, we’ll leave it to you because ours is probably not much better.

 

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