The ETHUSD pair has experienced a significant resurgence, spiking 30.18% last week and has already made a bullish beginning to the week. This price surge is coming on the back of a boom in Decentralized Finance, which has seen many of the financial apps on the leading blockchains preferring to host their projects on the Ethereum blockchain than on rivals Tron and other platforms. But analysts are asking if the boom in DeFi would lead to long-term adoption of Ether and other cryptos or whether this will end up like the ICO boom and bust era of 2017/2018.
The DeFi market has witnessed a growth of more than 23% in its user base in the past two months, attracting nearly 4billion dollars in investments. Many of these projects sound very good on paper, but those gaining some serious traction seem to lean towards the entertainment and gaming niches.
Ethereum has been a major beneficiary of the boom in DeFi and that is pushing the demand for the crypto asset. Many of the DeFi tokens have to be purchased using mainstream cryptocurrencies such as Ethereum. This is why DeFi has been the price pusher for the ETHUSD pair. Being correlated with Bitcoin, ETHUSD is also benefitting from the latest run of Bitcoin prices to the $11,000 mark.
Technical Outlook for ETHUSD
The weekly chart of the ETHUSD pair shows that the weekly candle of last week broke the descending channel with a closing penetration that exceeded 3%, which surpassed the price filter required to confirm the breakout. This move also took out the 256.22 and 280.93 resistance areas. Price has also violated the 300.24. However, the weekly candle needs to close above the 17 June and 8 July highs at 318.78 to confirm a break above that area. This could then trigger a march towards 361.69.
On the flip side, rejection at 318.78 could allow for a pullback towards the 300.24 price level, with 280.93 and 256.22 completing the support targets for the near-term.