The price of Ethereum is still trading above $400 after a strong run from the mid-March cryptocurrency market lows. The weekly chart is highlighting that we are at a pivotal level and caution is advised.
Ethereum was hit hard in the panic selling of alternative assets during the COVID crash. The second-largest cryptocurrency project by market cap touched a low of around $85 and has since rallied to trade at $403.78.
The recovery in the general cryptocurrency market was a driver of Ethereum’s recovery but it has also been powered by growth of Decentralized Finance (DeFi) projects, where the majority of those projects use Ethereum’s blockchain technology for their native tokens.
DeFi projects are involved in areas such as lending with companies using blockchain technology to try and disrupt the traditional financial landscape.
The rise in DeFi projects is maybe a gift and a curse for Ethereum because the rapid rise in fees to use the new platforms is becoming an obstacle. This may remove one of the bullish themes moving forward.
On the development front, Ethereum is still moving towards the long-awaited ETH 2.0 upgrade which will see the coin’s blockchain move to a “proof-of-stake” model and developers are seeking to bring added security, speed, and most importantly, an answer to the scalability issue that has long been a talking point in the sector.
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Ethereum Weekly Chart
The weekly chart in ETHUSD is showing that the price turned lower from a rising upward trendline that is running from 2017. We also have the horizontal-level of $361 level, which was a significant support level in 2018.
There is a risk that ETH can pull back from here as suggested by the trendline capping price, and as we saw in the summer of 2019, but if the coin can get above the recent highs near $450 then a further advance is possible. If the price slides below the $361 level then it could cause a slide to the February high around $290.
The cryptocurrency market was helped higher by the weakening U.S. dollar lately and this trend should be watched in the near-term.
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