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Ethereum currently trades for $450 as of this article’s writing, stuck in a short-term range with DeFi coins as Bitcoin has entered a phase of consolidation. Analysts are optimistic about the leading cryptocurrency due to technical signs indicating it may run back toward the highs.
Bitcoin is also seen as bullish by many analysts, who point to on-chain trends. Bitcoin continuing to press higher should bode well for Ethereum over a medium-term and long-term time frame.
Related Reading: Here’s Why Ethereum’s DeFi Market May Be Near A Bottom
Ethereum and DeFi Could Bounce, Key Chart Shows
According to prominent cryptocurrency trader “Flood,” Ethereum is primed to move even higher in the days ahead as key supports hold. He recently said that the cryptocurrency could bounce to $471 in the coming days:
“DeFi looks pretty neutral to bullish and I think $ETH looks primed for a 471 resistance tap. Added to longs. Will add more on 471 break and hold as well. #achartaday.”
Chart of ETH's price action over the past few days with an analysis by crypto trader Flood (@FloodXBT on Twitter). Source: ETHUSD from TradingView.com
There are some reasons to be concerned about Ethereum, though.
Analysts recently noted that there is a large amount of selling pressure on Huobi’s December futures market:
“kinda agree, Im hedging some of my DeFi exposure iva ETH, huobi whales have thick asks on quarterlies too so upside on ETH should be limited.”
Related Reading: Tyler Winklevoss: A “Tsunami” of Capital Is Coming For Bitcoin
All Eyes on Bitcoin
While Ethereum and DeFi may have the technicals to rally higher on their own, all eyes should be on Bitcoin. While altcoins have diverged from BTC over recent weeks and months, Bitcoin still leads the cryptocurrency market’s overall directionality.
Fortunately, most analysts remain bullish on BTC, which bodes well for altcoins such as Ethereum and DeFi coins.
Commenting on Bitcoin’s on-chain fundamentals, Willy Woo recently said:
“Realised Price estimates the average price the market paid for their BTC. Now at its steepest slope for this cycle, meaning capital influx into #Bitcoin is at its highest rate since the last bull market. (Higher than last year’s $4k-$14k move; the current move is more organic.). For the sake of this comment I’ll define “organic”. Organic price action happens when BTC price tracks closely with investor capital entering and leaving. When it’s inorganic BTC price is dominated by short term derivative traders.”
Ethereum and DeFi stand to benefit from continued risk-on behavior in the cryptocurrency markets.
Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
Featured Image from Shutterstock Price tags: defi, ethusd, ethbtc, eth Charts from TradingView.com Top Trader Expects Ethereum and Defi Remains Bullish on a Short-Term Basis
