Ether price analysis 8 Nov: Can bulls ascend $5,000?
Ether may reach $5,000 in the short term
Ether has risen more than 500% in 2021 while bitcoin has rallied about 120% during the same period. JPMorgan analysts, led by market strategist Nikolaos Panigirtzoglou, said in a recent note that the strong growth in decentralised finance (DeFi) and non-fungible tokens (NFTs) make ether a better bet than bitcoin as interest rates rise.
“The rise in bond yields and the eventual normalisation of monetary policy is putting downward pressure on bitcoin as a form of digital gold, the same way higher real yields have been putting downward pressure on traditional gold. With Ethereum deriving its value from its applications, ranging from DeFi to gaming to NFTs and stablecoins, it appears less susceptible than bitcoin to higher real yields,” Panigirtzoglou wrote, according to Markets Insider.
Another bullish voice advocating ether over bitcoin is that of billionaire investor Mark Cuban. In a recent episode of Next with Novo podcast, Cuban said: “I have my fair share of bitcoin, but I’m more of an Ethereum maximalist,” CNBC reported.
Goldman Sachs’ global markets managing director Bernhard Rzymelka said in a recent report that ether tracks inflation markets closely and if this trend continues, ether could skyrocket to $8,000 by the end of the year. However, if inflation rises sharply, central banks are likely to take steps to curb it – and that may result in a “longer-term market top” in ether, warned Goldman, Business Insider reported.
Could ether go up and extend its outperformance or will higher levels attract profit-booking? Read the ETH price analysis to find out.
Ether price technical analysis: weekly chart
ETH’s price rallied to a new all-time high according to Currency.com of $4,769.84 on Monday 8 November, indicating that the uptrend remains intact. The ETH/USD pair rose 5.09% to end last week at $4,617.63. The pair has now risen for the past four consecutive weeks.
Both moving averages are sloping up and the relative strength index is in the overbought zone, indicating that bulls are in command. The buyers will now attempt to push the price to the psychological level at $5,000 where the bears are expected to mount a strong resistance.
If the price turns down from $5,000 but does not break below $4,769.84, it will suggest that the bulls are buying on every minor dip. That will increase the likelihood of the resumption of the uptrend. The pair could then rally to $6,731.
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Alternatively, if the price turns down from the current level or the overhead resistance and breaks below $4,769.84, it will suggest that traders are booking profits at higher levels. The pair could then drop to $4,000 and if this support also cracks, the decline could extend to the 20-week exponential moving average (EMA).
Ether price technical analysis: daily chart
ETH’s price soared above the $4,381.71 to $4,461.52 resistance zone on 2 November. The bears tried to pull the price back below the breakout level but the long tail on the 6 November candlestick shows aggressive buying on dips.
The bulls have repeatedly defended the 20-day EMA during pullbacks, hence it becomes the critical support to watch out for. A break and close below the 20-day EMA will be the first sign that traders may be rushing to the exit.
If the price sustains below the 20-day EMA, the pair could extend its decline to the 50-day simple moving average.
Alternatively, on the upside, the bears may pose a stiff challenge at $5,000 but if bulls clear this overhead hurdle, the up-move could continue.
Ether buy or sell this week
Ether’s price analysis shows that bulls are in control. The pair could now rise to the psychological level of $5,000 which may act as a stiff resistance. The positive momentum may pick up if bulls drive the price above $5,000. Conversely, a break and close below the 20-day EMA will signal the start of a deeper correction.
The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial adviser before arriving at a decision.