With so much attention being devoted by news outlets to Facebook’s Libra and bitcoin, it is easy to miss what is happening with the altcoins.
Ethereum, which has been the №2 coin for some time, has recently gone from being ultra-bullish to bearish, as CCN reports. It says, “On June 26, investors were extremely bullish as the №2 cryptocurrency as its price rose from a 2018-bottom of $83 to the 2019-high of $363.30. That’s a massive gain of over 337 percent in six months.” It adds that since its biggest gains in June, it has been plunging and media reports on its situation have had an overwhelmingly bearish tone.
However, this does not mean that ethereum is down and out. Although it has dipped by 40% from its yearly high, it is back again above the $200 mark. Kiril Nikolaev at CCN believes this is “healthy for the long-term outlook of the market.” He goes on to comment: “We looked at the charts and two things are clear. First, an Ethereum bounce could be on the horizon. Second, the long-term uptrend of the coin remains intact due to robust fundamentals.”
Nikolaev also remarks that a close examination of ETH’s daily chart shows that bears are overextended and bulls are exploiting the situation.
On 16th July, ETH’s price dropped to $191, but buyers responded speedily by buying the dip. The bears even attempted to drive the price back down on 17th July, but bulls pushed back hard and sent the altcoin to as high as $219.47 on the same day.
What we are seeing, he says, is “selling relief as market participants appear to lose interest in dumping the coin at current levels.” Plus Nikolaev says that we should look at the fact that supply is drying up and that a slight surge in volume trading supports this assumption.
Another point to consider is the underlying strength of the ethereum blockchain. Ethereum leads all cryptocurrencies in terms of the number of active developers per month by a huge margin and has 216 active developers per month. This is four times the number of developers active on the bitcoin blockchain. With more active developers, ethereum is in a great position to lead all cryptocurrencies in innovation and rate of development.
And the number of transactions using ethereum is up; it stands at around 1 million transactions per day, which is a steep rise from the below 500,000 daily transactions number at the start of the year.