Ether Prices Bounced Back Today—What’s Next For The Digital Currency?

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Ether price climbed above $3,200 this afternoon and has remained above that level ever since.

The world’s second most valuable digital currency by market cap rose to $3,263.35 around noon EST. CoinDesk stats Display.

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Since that time, it has been trading within a very tight range, fluctuating between around $3,200 and $3,265, additional CoinDesk data shows.

Following these latest price movements, several analysts voice their opinions on the cryptocurrency’s recent volatility and its future prospects.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

‘A strong boom’

“We have seen a boom in the broader digital asset market today,” said investment advisor Brett Siffling. Gerber Kawasaki Wealth and Investment Management,

“Ethereum had a strong bounce off the $3,000 support level that it established from August to October 2021,” he said.

“Following a rapid decline of around ~40% from its all-time high, investors are anticipating a dead cat bounce at such key support levels.”

Mark Ellenowitz, president of the fintech firm horizon, spoke about these benefits, emphasizing the major impact made by recent statements by Federal Reserve Chairman Jerome Powell.

“Most of these price movements can be attributed to the Federal Reserve’s blatant policies.”

He claimed that “things are progressing” following Powell’s confirmation hearing today.

“Things seemed to have been in a bit of a rush, leaving many investors neutral and over-optimistic. However, a hike in interest rates is still possible.”

Ben McMillan, CIO IDX Digital Assets, also referred to comments made by the head of the US central bank describing Ether’s recent gains.

“Given how high Ether was, a quick bounce back is not surprising, as evidenced by the wide-ranging jump in all-risk assets on the back of Powell’s Senate Banking Committee comments.”

While these statements could make conditions around Ether look bullish, several analysts stressed that traders should be cautious.

“Investors should remember that there will be a new inflation report tomorrow, and higher inflation could lead to faster and more aggressive increases in interest rates,” Ellenowitz said.

“While I expect a general uptrend over the next few days, a misspelling by the Fed and the market could result in a fall right back down to where it was at the beginning of the week. Overall traders continue to monitor base rates. Should keep

Siffling also encouraged traders to be careful, but for a different reason.

“I would be cautious on this upside and not get too excited until we break the downtrend we have been experiencing since the November highs.”

key technical level

Moving forward, analysts are pointing to important levels of support and resistance.

“Ether is still facing a near-term resistance band between $3,300 and $3,600,” McMillan said.

“Breaking this range will be a real test of a strong move into the $4k zone.”

Ellenowitz made a similar offer, noting that “I see the next upside resistance at $3,500.”

He added that if Ether can overcome resistance near this level, “the next major band of resistance should be around $3,900.”

Armando Aguilar, an independent cryptocurrency analyst, also commented that a “key resistance level” identified exists between $3,550 and $3,800.

He pointed to important support between $2,800 and $3,000.

“$3k is an important support level for ETH. If both of these key support levels are breached, we could see ETH reach lows of $2,500 – $2,600.”

Siffling also spoke out, saying that if Ether was unable to maintain its current support level at $3,000, “I expect further support at the 2800 and 2500 levels.”

Ethereum 2.0

Going forward, Siffling emphasized the important role that Eth2, could be a bunch of upgrades designed to provide the Ethereum network with a number of improvements.

This setup update was made to make a number of changes, including the transition to proof-of-stake and severe shortage energy consumption.

“There is a lot riding on the Ethereum 2.0 network upgrade as the next catalyst,” he said.

“All eyes will be on this upgrade in 2022 as other blockchain technologies like Solana continue to rise as competitors due to their speed and cheap transaction fees.”

Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, eos and sol.

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