Ethereum price finally increased yesterday after days of decline. The cryptocurrency hit a low of $198 but bounced back $70 in one day to reach $268 at one time after settling at around $245.
The increase in prices followed reports that clarified what will happen to cryptocurrency exchanges in China. China has asked all crypto exchanges to shut down by the end of the month, except Huobi and OKCoin which are allowed to continue until the end of October.
Price instantly rose market wide upon the news after falling considerably in the past few days, with ethereum halved from around $400 to a low of $200 before recovering to a current price of $242 at the time of writing.
It’s unclear whether this is a bull trap, bear trap, or whether it is a trap at all. Plus, we’re very bad with Technical Analysis (TA), but if that’s a cup and handle on the weekly time frame, then whatever trap it is, it might be the biggest of all.
As of now things have stablized. Raising the question of where to from now. If we look at the above very long term time-frame chart, we have higher real highs and lower lows, suggesting an upwards direction. It’s unclear whether that shape is a cup and handle. The handle might be too deep, the U perhaps too narrow, but if it is, the upwards price movement would probably be very considerable.
As stated, we’re pretty bad with TA and none of any of this is any sort of advice, but if we look at fundamentals, you’d expect ethereum’s considerable rise in transactions to some half a million, somewhat double that of the previous all time high, to be reflected in a new all-time high double that of the previous one.
We haven’t seen that because bitcoin and many ICO tokens took the show, so eth has been taking a back seat. The launch of Metropolis may change that, but regarding the quantitative aspect, it looks like it might not decrease issuance at all.
That’s because although block rewards are lowered from 5 to 3, block times will be halved or so, which means that if developers have not made the calculations carefully, inflation might actually increase.
That might be unlikely, but we’ll have to wait and see, with the next known big event for Ethereum being Devcon3 when the ecosystem is to be presented on stage.
That’s in Mexico, this year, fairly close to the Americans, when we’ll hear of the progress that’s been made on scalability, privacy and much of the rest.