ETH bulls are building more and more strength – is Ethereum about to break out of a 2-year bear market?
ETH bulls are building more and more strength - is Ethereum about to break out of a 2-year bear market?
The crypto markets are holding steady after a slight retreat from their recent rally. Ethereum still looks strong too – but can the coin finally break out of its two-year bear market?
Ethereum bulls build strength
Since early 2020, Ethereum has outperformed Bitcoin. In just three weeks, the second most popular crypto asset in the world grew 33%, while its big brother “only” reached just over 20%.
Since the small retreat from the weekend, ETH prices have been slowly increasing, reaching $ 170 a few hours ago and staying there.
The next big resistance point is just over $ 180 where the 200-day moving average is – and beyond that the $ 200 psychological mark.
If current momentum continues, a golden cross between the 50-day moving average and the 200-day average could emerge by the end of January. The last time this happened was in early April 2019, followed by an increase of 133% over the next two months.
Longer-term technical signals are also becoming bullish. The weekly MACD has crossed for the fourth time in history, as this ETH trader notes.
“Watch weekly closing prices to confirm and maybe retest in the coming weeks, but super bullish!”.
ETHUSD Weekly MACD has crossed up for the 4th time in history. Watching for weekly close to confirm and maybe retest in coming couple weeks, but super bullish! #ethereum #cryptocurrency #bitcoin pic.twitter.com/JQx1yALZ8L
— Alex.eth (@AlexanderFisher) January 21, 2020
Others join the mood, with popular Twitter trader “Galaxy” commenting that Ethereum is about to break out of its two-year bear market.
“$ ETH is weeks before the start of its two-year downtrend. A bull signal may come next week. February is the starting month. “
Other Ethereum analysts also expect profits, one targeting $ 335. First things first – and that’s the $ 200 mark that, if broken, will result in a four-month high.
$ETH is weeks away from breaking out its 2-year downtrend.
Possible Bull signal incoming next week.
February is take-off month. pic.twitter.com/G7MUzIA03Y
— Galaxy (@galaxyBTC) January 21, 2020
What role does DeFi play?
A few years ago, Ethereum’s primary use case was to fund ICOs. After a worldwide regulatory slump and its epic collapse in 2018, millions of ETH were sold from the flooded markets.
The result was a two-year bear market in which Ethereum is still down at 87% below the all-time high.
Today, one of the fastest growing use cases for ETH is collateral in decentralized financial markets. According to defipulse.com, there is currently a record 3.2 million ETH locked away in DeFi protocols – this corresponds to almost 3% of the total offer.
Ethereum is increasingly used for decentralized bond and credit markets that can generate much higher returns than any other bank.
As this industry grows, demand for ether will follow – and that, coupled with Bitcoin’s momentum, could finally pull the digital inventory out of its own crypto winter.