ETHUSD: Ethereum Price Volatility Drops But Uptrend Intact

Ethereum ETHUSD

Ethereum price (ETH) consolidation is continuing as investors wait for another catalyst. The ETHUSD pair is trading at 431, which is a few pips below its YTD high of 449. Bitcoin, on the other hand, has jumped by more than 3% while Ripple price has jumped by 3.10%. Tether and Chainlink prices have dropped by 0.05% and 14% while the total market cap of cryptocurrencies has risen to more than $384 billion.

Ethereum price has recently been in an upward trend in recent months. The price has gained by more than 3% in the past three months and by more than 125% in the past 12 months. This makes it among the best-performing major cryptocurrency.

The recent gains have been because of several reasons. First, investors have moved to Ethereum and other digital currencies because of the ultralow real yields in the US and Europe. When yields drop, investors tend to move to assets like stocks and gold. Second, the recent gains have mostly been because of the ongoing Ethereum 2.0 upgrade. Third, the growth of Decentralised Finance (DeFi) has also contributed to the growth of Ethereum price.

Another important reason why Ethereum price hit a two-year high is the rising demand for the currency in the futures market. As I wrote yesterday, open interest in the futures market increased to $1.5 billion according to data compiled by Skew. This demand has led to a sharp increase in Ether fees, which rose to an all-time high last week. Most of the open interest of ETH is in Huobi and OKEx, which hold about $761 million worth of ETH futures.

So, does the Ethereum price have more runway to growth?

Ethereum price technical outlook

A look at the daily chart shows that Ethereum price volatility has been falling. This is evidenced by the falling Relative Volatility Index, which has dropped to the lowest level since July 22. The Average True Range (ATR), which is a good measure of volatility has also eased from its highest point a week ago.

ETHUSD volatility has been falling

Ethereum price volatility

In the daily chart, we also see that the price has found a strong resistance, which is shown in pink. This pattern is close in resemblance to a bullish pennant. Also, the price remains above the 50-day and 100-day exponential moving averages. Also, the RSI has moved from the overbought level of 90 to the current level of 70. Therefore, I suspect that Ethereum price will likely continue rising as bulls aim for the next resistance at 500.

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Ethereum Price Technical Chart

Ethereum Price

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