Barring a few days in the past two months, the ETHUSD pair had remained range-bound between $280 and $300. The ban on Bitcoin exchanges and ICO’s (Initial Coil Offerings) in China were largely responsible for the range-bound movement. Further, investors’ interest in Ethereum declined in South Korea, a major cryptocurrency market, after cryptocurrencies such as Z cash and Qtum rose to prominence. However, as discussed underneath, the positive developments related to Ethereum are expected to propel the ETHUSD pair in the week ahead.
The popularity of Ethereum is rising in non-traditional cryptocurrency markets such as the US. Last week, the US Ethereum market pipped South Korea to become the largest Ethereum market with a 33% market share. As cryptocurrency investors may be well aware off, exchanges in South Korea dominates the cryptocurrency industry. Even though the US has pushed South Korea to second place, still, the demand for Ethereum continues to rise in the South Asian nation. The success of the Byzantium hard fork has also contributed to the popularity of Ethereum in the US market.
JP Vergne, a professor at Ivey Business School, said the developer activity is one of the crucial indicators for estimating the price trend of cryptocurrencies. The activity of the Ethereum community has been commendable in 2017. Innovations such as second-layer Plasma solutions have provided a suitable platform for developing decentralized applications.
The Enterprise Ethereum Alliance, which includes institutions such as Sberbank of Russia, has started creating applications around the Ethereum network. That has increased the prospects of an increase in the price of the Ethereum coin, whose market capitalization increased from a mere $72 million to $28 billion in 2017. The platform created by Sber bank is expected to influence the growth in the corporate sector.
Later this week, cryptocurrency developers across the world are expected to attend Devcon, an annual event held in Cancun-Mexico, to discuss the developments in the cryptocurrency arena. Investors would be closely watching the event for updates on the Ethereum protocol. The four-day Devcon3 event, which was sold out in July, features 128 sessions in total.
Several top Ethereum platform technologists, including the creator Vitalik Buterin, Cornell University professor Emin Gun Sirer, and Ethereum Name Service (ENS) developer Nick Johnson are scheduled to address the top issues faced by the network. All the facts discussed above have stirred interest in the Ethereum coin again.
In the US, there is severe criticism and opposition to some of the changes that are planned to be brought about through tax reform. The National Association of Home Builders has vowed to defeat the tax reform as it is expected to affect the use of home mortgage deductions. Likewise, changes to individual retirement savings are facing increasing criticism from the opposition. Thus, concerns over a possible delay in the tax overhaul have turned the US dollar weak against the Ethereum.
The ETHUSD pair is trading above the strong support level of 294. Further, the stochastic oscillator has started rising from near the oversold region. Thus, we forecast a continuation of the current rally. The next major resistance for the cryptocurrency is at 346.
In order to benefit from the impending rally, we are considering buying a call option from a binary broker who is willing to offer a weekly expiry period. Provided we find a suitable contract, the investment will be made when the ETHUSD pair trades near $297 in any of the major cryptocurrency exchanges such as Bithumb, Coinone, Bittrex, etc.
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.
