We had predicted a decline in the ETHUSD pair, in our earlier report dated November 29th. Additionally, we had also mentioned our intention to go short in the ETHUSD pair near 470, with an aim to cover near 367. In line with our forecast, the pair fell to about 380 within a few days. However, the ETHUSD pair has bounced back strongly to $440 levels in the past two trading sessions. We anticipate the uptrend to continue due to the reasons given below.
At a blockchain conference held in Taiwan, Vitalik Buterin, the co-founder of the Ethereum blockchain network, revealed the roadmap of Ethereum development. Since Ethereum is an open-source platform for decentralized applications or apps, scalability function is a necessity.
Buterin anticipates the issue of scalability within the Ethereum network to be sorted out in another two to five years. Along with scalability, Buterin believes smart contract safety, privacy, and consensus protocol as other crucial problems that demand a better solution.
Notably, the developer preview of Raiden, a scaling solution, has been released already. Further, according to Buterin, the Ethereum Foundation and the open-source development community is looking at other scaling solutions such as Perun, Sharding, and Plasma. Ethereum Foundation has also made significant development in the upcoming launch of the Casper Testnet.
Notably, Buterin and Bitcoin’s Lightning Co-author Joseph Poon were behind the development of Plasma, a second layer scaling solution. Ethereum relies on proof-of-work consensus to verify transactions. In this regard, a hybrid proof-of-stake (PoS) and proof-of-work (PoW) were integrated through Casper technology.
Recently, the Ethereum network has been embedded with the zk-SNARK technology of Zcash. Thus, it is only a matter of time before private and anonymous transactions will be feasible through the Ethereum network.
On the basis of these developments, billionaire hedge fund manager Mike Novogratz has forecast the price of the Ether coin to triple by the end of 2018. Thus, an impressive future plan and active developer community are expected to spark another rally in Ether.
As shown below, the ETHUSD pair is consolidating at 450 levels, which is also the base of the ascending triangle pattern. The RSI indicator is moving above the reading of 50. Thus, we can expect a resumption of the uptrend.
To generate returns from the predicted uptrend, we may take a long position in the ETHUSD pair near 450, with a stop-loss order below 400. If the pair rallies as expected, then we will sell our long position near 586.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
