May 4, 2021
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Ethereum Price Hits Another All Time High

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Breaking down ETH and BTC price action.

Ethereum just broke $3,000 for the first time ever.

Taking down a critical psychological barrier, the world’s second-largest cryptocurrency by market cap has seen positive gains for seven consecutive months. It’s among one of many altcoins making moves as of late.

The industry is bullish on Ethereum.

Activity is increasing on the Ethereum network.

Much of the rise in network activity is thanks to positive news surrounding Ethereum. The European Investment Bank is issuing digital bonds on Ethereum, there are Ethereum ETFs in Canada, and the ETH 2.0 transition to a proof-of-stake consensus model is becoming a reality.

Just the other day, Coinbase even notified users that they can now stake ETH on their platform to earn a percentage yield on any holdings.

Quick pause — what is staking?

Proof-of-stake means that coins held on the network validate transactions. The more coins an owner has (and sometimes the older the coins are), the more that owner is rewarded.

This is in contrast to proof-of-work, which rewards miners with coins for validating transactions. Miners, like myself, do this by running software on custom-built hardware.

Miners won’t be around forever.

I mine Ethereum. Our time is limited. It’s inevitable that mining profitability around Ethereum will decrease in the coming months.

The more staking is introduced across major platforms, the more Ethereum advances its overall roadmap around ETH 2.0.

Bitcoin is eyeing $60,000 again.

Bitcoin is universal and open source, it’s not tied to any centralized entity anywhere. It doesn’t operate like the traditional markets. There are no after hours trading periods. It’s always on.

Bitcoin even sees moves in relation to when Asian markets wake up versus American markets and everything in between. It’s always happening. BUT, Bitcoin is also largely bolstered by investors and platforms more closely tied to those traditional markets, so there’s no telling what any Monday can bring.

I’m hesitant to say I’m anything but bullish, but I think the next few months are going to be huge for Bitcoin and the overall crypto market.

That means that Ethereum’s momentum is likely to continue too. As always, though, as Bitcoin moves, so does the market.

Ethereum can successfully hit ETH 2.0 checkpoints, increase activity on the network, and still see a price decline if Bitcoin corrects though.

Despite the recent talk about ETH breaking away from BTC and moving independently, the jury is still out. Ethereum is yet to be tested on its own. This new all time high price action could very well be Ethereum’s first major test without Bitcoin.

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Great things are happening on a lot of projects, but we’ve seen great projects rise and fall (and even disappear) in the past. Look at 2017–2018. Plenty of altcoins didn’t survive the bear market afterward…

Everyone looks like a genius in a bull market. Dogecoin, an altcoin that’s had no meaningful development since its inception and that has an unlimited supply of coins pumps in a bull market. But, so do “quality” projects like Ethereum. It’s hard to see the forest for the trees right now.

The point is that everything pumps in a bull market. It is the bear market where actual network development occurs, and we see what projects will remain alongside Bitcoin.

Where does Bitcoin go next?

$60,000 is the next upward price level to watch for Bitcoin. We’re seeing significant resistance there, so Bitcoin is primed for another big test this week. Buy/sell demand on crypto exchanges is setting BTC up for a challenge, but that could change at any point.

Fresh inflows of cash or stablecoins onto exchanges and what they do next could signal which direction we go. As long as BTC trends upward (or even sideways), it’ll consolidate and possibly build FOMO sentiment as it creeps back toward the all time high of $65,000.

BTC 3-Month Chart

Consolidation in the mid-high $50,000s is critical right now. Bitcoin isn’t showing strong support anywhere close to current levels. As of writing, BTC is closing on $59,000 and the closest lower support level is $52,000.

A successful push to $65,000 opens up Bitcoin to several price calls we’ve seen between $72,000–77,000. If that happens, it’s off to the races — possibly toward those higher calls we’ve seen such as $115,000 from Pantera Capital.

We can’t ignore the impact of ETH on BTC this week.

With the new ETH all time high, it’s important to watch what traders do — as always, especially those whale and newcomer segments.

Odds are that newer retail investors will jump on the Ethereum rally but they could flip to Bitcoin if it takes down $60,000, not wanting to miss another BTC all time high.

I’ve seen ETH price predictions of $3,500 by week’s end. I’m also starting to see talk of $10,000 ETH by the end of 2021… All of this is based on very recent price action though.

There’s so much uncertainty around the market.

ETH has a lot to live up to.

The network must continue to see steady transaction volume (despite high fees), increased staking, AND it has to ultimately reduce transaction fees as ETH 2.0 rolls out.

If Ethereum can stay on track and hit its checkpoints, it could be a bullish few months for it and other altcoins — but of course, Bitcoin price action can always change everything.

Brace yourself for the week ahead.

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Article Categories:
Bitcoin · cryptocurrency · Ethereum · investing · money

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