Ether, the native token of the Ethereum blockchain, had begun enjoying a highly silvery status, soon after it burst onto the cryptocurrency world! It was put almost on the same pedestal as Bitcoin was!
However, its position has been severely threatened in the last month or so, thanks to price volatility and other causes hitting the digital currency arena. Of course, it is not the only crypto to have suffered; others have too! Unfortunately, Ether has reduced in value by over 40%. The pricing has come down to $1,770. Fortunately, for crypto enthusiasts, the plunge has stopped, at least for now! This has spurred experts to believe that ETH is all set to bounce back, and regain its former position! Just like ETH, Bitcoin is a cryptocurrency that can be heard everywhere and if you are interested to know more about how it works and where to use it, you may check here.
Here are the reasons why they feel so.
First Valid Support Line
People have not lost their fondness for Ether, regardless of all the difficulties that it has been confronting since 2021. In fact, the support for the coin and the Ethereum blockchain has reached massive proportions! Such news may not be visible on the intraday/daily charts. Nonetheless, the support is there, as is evinced by the way Ether has been comfortably traversing the $1,700-$1,800 zone.
The way the coin managed to stand on its own feet during the sudden crypto crash on May 12, suffices to reassure its fans of its bounce-back capacity. Its value had come down to 10%. Yet, within the span of a few hours, ETH was back on its feet! In short, ETH survives, because of its never-say-die attitude!
Second Valid Support Line
Known as the 200-day moving average, it is a second support line that helps coins/tokens facing a bearish market, to wait confidently for the bullish run to begin!
Investors and marketers keep a keen eye on the 200-day SMA (simple moving average), to comprehend the future trends of global marketplaces. The indicator is represented by a line on a chart. It moves at random, going higher or lower, in alignment with changes in pricing. The pricing is generally for long-term investments in a commodity, stock, etc.
The 200 days cover 40 weeks of trading. If the price of the stock reveals itself to be above the 200-day simple moving average, on the daily chart, the watchers may safely conclude that the market is moving upwards. However, investors prefer to observe for 255 days, rather than for 200 days. Sometimes, there is a comparison between 50 days of simple moving average and 200 days of the same. Whatever average lines the investors compare, the result suffices to boost or lower their confidence!
Regarding Ethereum/Ether, no one seems to have bothered with the 200-SMA, over the last 100 weeks! Therefore, we may conclude that ETH has not been put too severely to the test!
Overselling of ETH
The RSI indicator refers to the Relative Strength Index indicator. It measures the extent of price changes that have taken place recently, in connection with a particular commodity, stock, coin/token, etc. This way, the investors can make out if there has been over-purchasing or over-selling of the concerning cryptocurrency. In this case, it is ETH or Ether. Investors/traders also keep track of the way the prices are moving. How quickly are people bidding the price of the security, in the upward/downward direction? It is displayed on a scale of 0-100.
If the scale goes below 30, it suggests that the stock is going for an oversell. It is what the readings with ETH revealed! Alternatively, if the reading goes above 70, it suggests that the stock has been overbought.
With Ether, investors have noticed that stockholders are willing to sell as much as possible. The volatility of the prices, after the crypto crash, is making them feel that they should strive to garner as much profits as possible. Currently, ETH is trading at $2,000, much lower than Bitcoin is. Nonetheless, investors are not worried. Instead, they have other worries. One, other cryptocurrencies are proving to be riskier assets. Inflation is rising. The FBI is making its monetary policies more stringent. Obviously, the fact that the digital currency market underwent a loss of $200 billion in just one day of the crypto crash, proved to be sufficient reason for this step!