Ethereum

The Future Price of Ethereum — Technical Analysis

Digitex Futures
• Dave Reiter
April 12, 2021

Similar to other coins and tokens, Ethereum has generated a substantial rally throughout the past six months. Specifically, ETH has increased 498%, outperforming BTC by approximately 60% during the same time period (see chart 1 below). So, where do we go from here? How will ETH perform for the remainder of 2021 and beyond? Let’s explore the details.

The Future Price of Ethereum — Technical Analysis 1

The Difference Between Ethereum and Ether

In terms of market capitalization, ETH is the second-largest cryptocurrency in the crypto universe. Only Bitcoin has a larger market capitalization. ETH has enjoyed some explosive price moves throughout its brief 6-year history. But, before we analyze the future price direction of ETH, let’s briefly discuss the difference between Ethereum and Ether.

There seems to be some confusion regarding these two crypto terms. Ethereum is a blockchain-based platform used for writing autonomous smart contracts and decentralized applications. Ether is the cryptocurrency that serves as the fuel to power the smart contracts, apps, and other transactions on the Ethereum blockchain.

Although most people in the crypto community (including many crypto websites) use these words interchangeably, they are actually quite different in terms of how they are used in the crypto ecosystem.

Use Cases for Ethereum Blockchain Continue to Expand

In this article, we will be analyzing the price direction of Ether (ETH), the cryptocurrency. However, it’s also important to discuss Ethereum, the blockchain, because it lays the foundation for the current ETH bull market. It seems almost impossible to believe that Ether was trading below $100 per token less than 15 months ago (see chart 2).

The Future Price of Ethereum — Technical Analysis 2

Over the course of the past 15 months, ETH has exploded to the upside by increasing 2,226%. Since March 2020, ETH has been one of the top-performing cryptocurrencies within the entire crypto universe. Ether easily outperformed Bitcoin during this particular time period, 2,226% versus 1,388%.

The majority of Ether’s gains can be attributed to the fact that the total number of use cases for the Ethereum blockchain has increased substantially. Unlike the Bitcoin blockchain, Ethereum can be used for multiple applications across a wide variety of industries. Several of these applications have evolved into legitimate and profitable business enterprises with exponential growth potential. Let’s briefly examine a few of these Ethereum-based businesses.

DeFi (Decentralized Finance)

Without question, the most exciting new business linked to Ethereum is decentralized finance, more commonly known as DeFi. Although DeFi has been in existence for less than four years, it has gained an incredible amount of interest from venture capital firms and angel investors who see the enormous potential in this new space.

Without going into great detail, DeFi competes head-to-head with the legacy financial services industry, with an estimated value of $26.5 trillion by 2022, according to data gathered by The World Bank. Based on these numbers, the upside potential in DeFi is massive. This is great news if you are an owner of ETH because the overwhelming majority of the DeFi ecosystem operates on the Ethereum blockchain.

NFTs (Non-Fungible Tokens)

Another business venture associated with Ethereum is non-fungible tokens (NFT), which have witnessed a tremendous wave of enthusiasm from investors and speculators during the past few months. Very briefly, non-fungible tokens allow non-fungible assets to possess unique properties that completely change the user and development relationship of these assets.

Examples of non-fungible digital assets include digital collectibles, such as in-game items and characters, virtual pets, and representations of fine art. By attaching unique properties such as immutability and scarcity to non-fungible assets, it substantially increases the value of said assets.

Almost the entire NFT industry operates on the Ethereum blockchain, which is obviously bullish for ETH. Arguably, the most exciting part of NFTs is the fact that young people are heavily involved in this exciting new space. Consequently, this will provide Generation Z with an opportunity to familiarize themselves with cryptocurrencies and other digital assets. This is very bullish from a long-term perspective.

In addition to DeFi and NFT, the Ethereum blockchain is also actively engaged in enterprise software, which is used by organizations, businesses, charities, schools, and governments to handle day-to-day operations across a wide variety of internal departments within each organization.

These daily operations would include such tasks as human resources, supply chain management, database management, CRM, security, and billing systems. Enterprise software companies are using a privatized version of the Ethereum network to provide their services to companies like Microsoft, IBM, JPMorgan Chase, and Deloitte.

These are just a few examples of how the Ethereum blockchain is linked to industries and businesses across the global economy. Of course, this is extremely bullish for ETH because these companies and businesses must purchase ETH in order to pay for their services on the Ethereum blockchain. Many crypto experts believe that the number of use cases for Ethereum will continue to expand as blockchain technology becomes more common throughout the global economy.

Using TA to Forecast the Price of ETH

Technical analysis has been extremely useful in forecasting the future price direction of ETH. Let’s review a few of these indicators.

Arguably, the most reliable technical indicator in modern history was created by a twelfth-century Italian mathematician by the name of Leonardo Fibonacci. The vast majority of mathematical historians consider Fibonacci to be the greatest mathematician of the Middle Ages. In fact, many experts in the field of mathematics claim that Fibonacci was one of the ten greatest mathematicians of all time.

Fibonacci made several important contributions to the field of mathematics throughout his life. However, he will always be most famously known for Fibonacci numbers, which are a sequence of numbers developed by Fibonacci circa 1202.

Fibonacci numbers are used in the study of nature, music, agriculture, computer applications, price forecasting, and several other fields of study. Stock and commodity traders use “Fib” numbers to calculate support and resistance levels.

The most common Fib levels are:

  • .236
  • .382
  • .500
  • .618
  • .786
  • 000

It’s not uncommon for financial assets like cryptocurrencies to fluctuate between Fibonacci support and resistance levels for long periods of time. When a major breakout finally occurs, it usually marks the beginning of a substantial move.

The crypto trading community would love to know the final top in ETH before a new bear market ensues, probably near the end of 2021 or early-2022. Of course, it’s impossible to accurately forecast the final top of any speculative asset. Cryptocurrencies are particularly difficult because we have such a small sample size of historical data. However, we can use Fibonacci numbers to develop an educated forecast concerning the final top for Ether. Please review the calculation on Chart 3 below:

The Future Price of Ethereum — Technical Analysis 3

There are several different ways to use Fib levels as a forecasting device. The most popular format involves calculating the price difference between two important price levels. For this particular calculation, we selected the historic high from January 2018 and the subsequent low achieved in December of the same year.

The majority of Fibonacci experts agree that .618 is the most significant Fib level. Therefore, we will use this number in our calculation. Based on the Fibonacci calculation, the final top for this cycle will be 4,921.73. If ETH follows the same path as the 2017 bull market, the top will occur in late-2021.

Another useful technical indicator is the Relative Strength Index (RSI), which was created by J Welles Wilder Jr, one of the greatest technical analysts in the history of financial markets. RSI is a momentum indicator that measures the overbought or oversold condition of a speculative asset. RSI is typically displayed in an oscillator format, which fluctuates between 0 and 100.

Generally speaking, a market is considered overbought if the RSI reading exceeds 70. Conversely, the market is considered oversold if the RSI reading falls below 30. Many traders will use a reading above 70 as a trigger to generate a sell signal and a reading below 30 will generate a buy signal. However, this is not a good strategy to follow in a momentum-fueled environment like cryptocurrencies. Please review Chart number 4:

The Future Price of Ethereum — Technical Analysis 4

The RSI reading has been above 70 since November 9, 2020, when ETH was trading @ 446.10. Obviously, this was not a good time to sell ETH. In fact, this would have been a great time to buy Ether. Therefore, an argument could be made that the optimum way to use RSI for trending markets like cryptocurrencies is to wait for a bullish breakout above 70 as a buy signal. A bearish breakout below 30 would constitute a sell signal. Trying to pick tops and bottoms in a trending market is a recipe for disaster. As Chart #4 clearly demonstrates, the best course of action is to follow the momentum.

In addition to RSI, another momentum-based indicator is the Money Flow Index (MFI). This indicator measures the inflow and outflow of money into a speculative asset over a specific period of time. It uses price and volume to calculate trading pressure. Arguably, MFI is the purest way to determine the amount of money entering and leaving a particular asset class.

Similar to RSI, the index fluctuates between 0 and 100. In terms of trending markets like cryptocurrencies, the best way to apply MFI is to wait for a bullish breakout above 70 or a bearish breakout below 30. MFI is located at the bottom of Chart #5.

The Future Price of Ethereum — Technical Analysis 5

An Ether buy signal was generated @ 509.11 on November 23, 2020, when MFI penetrated the 70 level. MFI has been continuously above 70 for the past five months. This is a perfect example of why it’s best to follow the trend of the market and avoid the temptation to pick a top or bottom.

At least for now, the trend of ETH is clearly in favor of the bulls. The vast majority of technical indicators are forecasting a continuation of the bull market. In addition to technical analysis, the fundamental backdrop for Ether is extremely bullish, as more use cases are being added to the Ethereum blockchain. Eventually, this bullish cycle will end and a new bear cycle will begin. However, this current bullish phase could easily continue for the remainder of 2021.

Don’t forget that whether the price of ETH goes up or down, you can make money trading ETH futures on our zero-fee rapid-fire ladder trading platform. Sign up here to find out how easy it is to profit from even the smallest of price fluctuations when you’re not constantly losing out to commissions. 

Digitex Futures writers and/or guest authors may or may not have a vested interest in the Digitex Futures project and/or other businesses mentioned throughout the site. None of the content on Digitex Futures is investment advice nor is it a replacement for advice from a certified financial planner.

April 12, 2021
Digitex Futures

The Future Price of Ethereum — Technical Analysis

Dave Reiter
Ethereum

Similar to other coins and tokens, Ethereum has generated a substantial rally throughout the past six months. Specifically, ETH has increased 498%, outperforming BTC by approximately 60% during the same time period (see chart 1 below). So, where do we go from here? How will ETH perform for the remainder of 2021 and beyond? Let’s explore the details.

The Future Price of Ethereum — Technical Analysis 6

The Difference Between Ethereum and Ether

In terms of market capitalization, ETH is the second-largest cryptocurrency in the crypto universe. Only Bitcoin has a larger market capitalization. ETH has enjoyed some explosive price moves throughout its brief 6-year history. But, before we analyze the future price direction of ETH, let’s briefly discuss the difference between Ethereum and Ether.

There seems to be some confusion regarding these two crypto terms. Ethereum is a blockchain-based platform used for writing autonomous smart contracts and decentralized applications. Ether is the cryptocurrency that serves as the fuel to power the smart contracts, apps, and other transactions on the Ethereum blockchain.

Although most people in the crypto community (including many crypto websites) use these words interchangeably, they are actually quite different in terms of how they are used in the crypto ecosystem.

Use Cases for Ethereum Blockchain Continue to Expand

In this article, we will be analyzing the price direction of Ether (ETH), the cryptocurrency. However, it’s also important to discuss Ethereum, the blockchain, because it lays the foundation for the current ETH bull market. It seems almost impossible to believe that Ether was trading below $100 per token less than 15 months ago (see chart 2).

The Future Price of Ethereum — Technical Analysis 7

Over the course of the past 15 months, ETH has exploded to the upside by increasing 2,226%. Since March 2020, ETH has been one of the top-performing cryptocurrencies within the entire crypto universe. Ether easily outperformed Bitcoin during this particular time period, 2,226% versus 1,388%.

The majority of Ether’s gains can be attributed to the fact that the total number of use cases for the Ethereum blockchain has increased substantially. Unlike the Bitcoin blockchain, Ethereum can be used for multiple applications across a wide variety of industries. Several of these applications have evolved into legitimate and profitable business enterprises with exponential growth potential. Let’s briefly examine a few of these Ethereum-based businesses.

DeFi (Decentralized Finance)

Without question, the most exciting new business linked to Ethereum is decentralized finance, more commonly known as DeFi. Although DeFi has been in existence for less than four years, it has gained an incredible amount of interest from venture capital firms and angel investors who see the enormous potential in this new space.

Without going into great detail, DeFi competes head-to-head with the legacy financial services industry, with an estimated value of $26.5 trillion by 2022, according to data gathered by The World Bank. Based on these numbers, the upside potential in DeFi is massive. This is great news if you are an owner of ETH because the overwhelming majority of the DeFi ecosystem operates on the Ethereum blockchain.

NFTs (Non-Fungible Tokens)

Another business venture associated with Ethereum is non-fungible tokens (NFT), which have witnessed a tremendous wave of enthusiasm from investors and speculators during the past few months. Very briefly, non-fungible tokens allow non-fungible assets to possess unique properties that completely change the user and development relationship of these assets.

Examples of non-fungible digital assets include digital collectibles, such as in-game items and characters, virtual pets, and representations of fine art. By attaching unique properties such as immutability and scarcity to non-fungible assets, it substantially increases the value of said assets.

Almost the entire NFT industry operates on the Ethereum blockchain, which is obviously bullish for ETH. Arguably, the most exciting part of NFTs is the fact that young people are heavily involved in this exciting new space. Consequently, this will provide Generation Z with an opportunity to familiarize themselves with cryptocurrencies and other digital assets. This is very bullish from a long-term perspective.

In addition to DeFi and NFT, the Ethereum blockchain is also actively engaged in enterprise software, which is used by organizations, businesses, charities, schools, and governments to handle day-to-day operations across a wide variety of internal departments within each organization.

These daily operations would include such tasks as human resources, supply chain management, database management, CRM, security, and billing systems. Enterprise software companies are using a privatized version of the Ethereum network to provide their services to companies like Microsoft, IBM, JPMorgan Chase, and Deloitte.

These are just a few examples of how the Ethereum blockchain is linked to industries and businesses across the global economy. Of course, this is extremely bullish for ETH because these companies and businesses must purchase ETH in order to pay for their services on the Ethereum blockchain. Many crypto experts believe that the number of use cases for Ethereum will continue to expand as blockchain technology becomes more common throughout the global economy.

Using TA to Forecast the Price of ETH

Technical analysis has been extremely useful in forecasting the future price direction of ETH. Let’s review a few of these indicators.

Arguably, the most reliable technical indicator in modern history was created by a twelfth-century Italian mathematician by the name of Leonardo Fibonacci. The vast majority of mathematical historians consider Fibonacci to be the greatest mathematician of the Middle Ages. In fact, many experts in the field of mathematics claim that Fibonacci was one of the ten greatest mathematicians of all time.

Fibonacci made several important contributions to the field of mathematics throughout his life. However, he will always be most famously known for Fibonacci numbers, which are a sequence of numbers developed by Fibonacci circa 1202.

Fibonacci numbers are used in the study of nature, music, agriculture, computer applications, price forecasting, and several other fields of study. Stock and commodity traders use “Fib” numbers to calculate support and resistance levels.

The most common Fib levels are:

  • .236
  • .382
  • .500
  • .618
  • .786
  • 000

It’s not uncommon for financial assets like cryptocurrencies to fluctuate between Fibonacci support and resistance levels for long periods of time. When a major breakout finally occurs, it usually marks the beginning of a substantial move.

The crypto trading community would love to know the final top in ETH before a new bear market ensues, probably near the end of 2021 or early-2022. Of course, it’s impossible to accurately forecast the final top of any speculative asset. Cryptocurrencies are particularly difficult because we have such a small sample size of historical data. However, we can use Fibonacci numbers to develop an educated forecast concerning the final top for Ether. Please review the calculation on Chart 3 below:

The Future Price of Ethereum — Technical Analysis 8

There are several different ways to use Fib levels as a forecasting device. The most popular format involves calculating the price difference between two important price levels. For this particular calculation, we selected the historic high from January 2018 and the subsequent low achieved in December of the same year.

The majority of Fibonacci experts agree that .618 is the most significant Fib level. Therefore, we will use this number in our calculation. Based on the Fibonacci calculation, the final top for this cycle will be 4,921.73. If ETH follows the same path as the 2017 bull market, the top will occur in late-2021.

Another useful technical indicator is the Relative Strength Index (RSI), which was created by J Welles Wilder Jr, one of the greatest technical analysts in the history of financial markets. RSI is a momentum indicator that measures the overbought or oversold condition of a speculative asset. RSI is typically displayed in an oscillator format, which fluctuates between 0 and 100.

Generally speaking, a market is considered overbought if the RSI reading exceeds 70. Conversely, the market is considered oversold if the RSI reading falls below 30. Many traders will use a reading above 70 as a trigger to generate a sell signal and a reading below 30 will generate a buy signal. However, this is not a good strategy to follow in a momentum-fueled environment like cryptocurrencies. Please review Chart number 4:

The Future Price of Ethereum — Technical Analysis 9

The RSI reading has been above 70 since November 9, 2020, when ETH was trading @ 446.10. Obviously, this was not a good time to sell ETH. In fact, this would have been a great time to buy Ether. Therefore, an argument could be made that the optimum way to use RSI for trending markets like cryptocurrencies is to wait for a bullish breakout above 70 as a buy signal. A bearish breakout below 30 would constitute a sell signal. Trying to pick tops and bottoms in a trending market is a recipe for disaster. As Chart #4 clearly demonstrates, the best course of action is to follow the momentum.

In addition to RSI, another momentum-based indicator is the Money Flow Index (MFI). This indicator measures the inflow and outflow of money into a speculative asset over a specific period of time. It uses price and volume to calculate trading pressure. Arguably, MFI is the purest way to determine the amount of money entering and leaving a particular asset class.

Similar to RSI, the index fluctuates between 0 and 100. In terms of trending markets like cryptocurrencies, the best way to apply MFI is to wait for a bullish breakout above 70 or a bearish breakout below 30. MFI is located at the bottom of Chart #5.

The Future Price of Ethereum — Technical Analysis 10

An Ether buy signal was generated @ 509.11 on November 23, 2020, when MFI penetrated the 70 level. MFI has been continuously above 70 for the past five months. This is a perfect example of why it’s best to follow the trend of the market and avoid the temptation to pick a top or bottom.

At least for now, the trend of ETH is clearly in favor of the bulls. The vast majority of technical indicators are forecasting a continuation of the bull market. In addition to technical analysis, the fundamental backdrop for Ether is extremely bullish, as more use cases are being added to the Ethereum blockchain. Eventually, this bullish cycle will end and a new bear cycle will begin. However, this current bullish phase could easily continue for the remainder of 2021.

Don’t forget that whether the price of ETH goes up or down, you can make money trading ETH futures on our zero-fee rapid-fire ladder trading platform. Sign up here to find out how easy it is to profit from even the smallest of price fluctuations when you’re not constantly losing out to commissions. 

Digitex Futures writers and/or guest authors may or may not have a vested interest in the Digitex Futures project and/or other businesses mentioned throughout the site. None of the content on Digitex Futures is investment advice nor is it a replacement for advice from a certified financial planner.

Latest News

March Market Wrap Up - Bitcoin and Ether 11

March Market Wrap Up – Bitcoin and Ether

Digitex Futures
• Digitex
March 31, 2021

Historically, with the notable exception of ‘Black Thursday’ in 2020, March has been an uneventful month for cryptocurrencies. Yet, a lot has changed in 2021. Bitcoin (BTC) price shot above $60K on two separate occasions this March, and Ether (ETH) has made significant strides as well. Let’s take a look at the last 30 days in the life of BTC and ETH to see what factors influenced their behavior, as well as speculate on what may be coming as we move into a new month. 

Bitcoin (BTC)

March Market Wrap Up - Bitcoin and Ether 12

BTC began the month at around $47K facing some fairly strong headwinds the first few days of March in the shape of a widespread tech sell-off sparked by rising bond yields that tested all risk assets. The sell-off was short-lived with the bulls firmly back in control by March 9, as the yield market began to cool off. In fact, BTC went on to mark its all-time high above $61K by March 14.

Since then, we’ve seen a mixed bag from the number-one cryptocurrency which didn’t stay above the $60K barrier for long. Many analysts point to an inaccurate alert by South Korean blockchain analysis firm CryptoQuant about a huge impending whale dump on Gemini as the trigger for the correction. Others say that price corrections are expected and likely triggered by profit-taking around the psychological $60K level.

Either way, BTC rebounded once more and briefly reached above $60K again on March 20, trying its hardest to close out the month above $60K before falling back to around $58K on March 31 at the time of writing. So, what key events have affected BTC price this month?

Key Events in BTC in March

Apart from the rising yield in U.S. treasuries and a rebounding bond market which typically moves investors away from risk assets, most of the news surrounding BTC in March has been bullish. From the Goldman Sachs and Fidelity Bitcoin ETF filings to Tesla officially announcing that it now accepts payment for cars in BTC, is running its own node, and will be HODLing all the proceeds, March was anything but uneventful.

We had more institutional players announcing moves into Bitcoin, with both Morgan Stanley and JPMorgan offering BTC funds to their wealthiest clients. High-profile Norwegian oil and gas giant Aker ASA revealed the creation of a cryptocurrency arm with an opening $59 million investment, and MicroStrategy’s Michael Saylor (and other bullish investors) continued to buy the dip. 

We also saw a record $6 billion in BTC options expire that many believe will continue to send volatile shock waves through the market as we move into April. Yet, perhaps the most notable developments regarding Bitcoin fundamentals came during the last week of March, taking BTC from a low-point of near $50K to close to re-piercing the $60K barrier as payments giant PayPal announced that it would allow its U.S. customers to make purchases with crypto. 

That wasn’t the only news to give the crypto markets a shot in the arm, as Visa announced its first settlement on the Ethereum blockchain using USDC; a massive development that could serve as the bellwether for mainstream acceptance of crypto-native payment methods. In addition to that, CME announced yesterday that it will be launching micro BTC futures sized at one-tenth of a BTC from May.

All these developments, added to record highs in hashrate, open interest, miner revenue, and increased announcements from institutions definitely suggest more bullish action on the horizon for the months ahead. Added to that the Fed’s announcement about maintaining a loose monetary policy and the passing of a $1.9 trillion stimulus bill, and we have a perfect storm for hard assets. So, where will BTC price go next? 

Bloomberg Intelligence suggests that $400K at the end of the year is not an unrealistic target, while Stock-to-Flow proponent Plan B believes the bull run is just getting started. Trader and market analyst Michaël van de Poppe is looking at the nearer-term, calling for at least a $68K BTC in April — and a surge in altcoins as well. April is historically bullish for Bitcoin with only two bearish Aprils on record. Watch this space.

Ether (ETH)

March Market Wrap Up - Bitcoin and Ether 13

In many ways, the decentralized world computer and backbone of the growing DeFi economy, Ethereum, has had a tougher slog this month compared to BTC. A lot of the narrative in the first half of March surrounded Ethereum’s scaling issues with skyrocketing network fees and congestion problems.

Several competitors began flexing their muscles in the shape of Cardano, Solana, Algorand, Stellar, and Binance Smart Chain (BSC). In fact, Binance’s BNB became a top-three coin in February but was briefly ousted from the spot in March by Cardano’s ADA, touted by many to be an ‘Ethereum killer.’ 

ADA has since dropped several places down to fifth in the ranking since then, and, while there may be a lot of talk about toppling Ethereum, it’s just not that easy to hit network effect right off the bat. On-chain metrics suggest that competitors still have a very long way to go to catch up to Ethereum, which still has by far the largest developer community in the space, the most decentralized applications built on it, and is the enabler of the majority of DeFi projects and protocols. 

Moreover, Ethereum began to address its scaling problems in earnest, with Vitalik Buterin himself admitting that scalability was an urgent issue. He said that the solution was coming soon in the form of rollups that will see the mighty blockchain through until its transition to Proof of Stake and ETH 2.0. 

While ETH price didn’t recoup its all-time highs of above $2K set in February, it also rallied hard in keeping with BTC. And, with the news of Visa using its blockchain to settle payments, the rising NFT craze as Dapper Labs (the company behind CryptoKitties and NBA Topshot) raises $305 million from investors, and the increased popularity of DeFi ETH looks set to make another run at its $2K high any time now.

With the increased institutional interest in ETH, the upcoming Berlin hard fork in April which will go some ways to addressing high gas fees and making the Ethereum blockchain more robust, and increased announcements from Visa and other financial giants, ETH price looks set to have another record-breaking month in April.

Digitex (DGTX)

March Market Wrap Up - Bitcoin and Ether 14

The DGTX token, while still light years away from its all-time high and with a lot more to prove, has experienced its own rally in March, climbing back above 2 cents at its highest point on March 21, and ending the month up 222%. We have also more than doubled the number of new users on the exchange, increased liquidity, and tightened bid/ask spreads thanks to our new Liquidity Mining program on the exchange that pays you to trade, and made significant improvements to the UX/UI.

As we enter the second quarter of 2021, we look forward to more bullish developments. The launching of our zero-fee spot markets is our primary focus and we’ll be rolling out more key updates throughout the same period. 

During that time, be sure to take advantage of the gains to be made during this bull market and its massive volatility by trading BTC and ETH futures zero-fee on Digitex–getting paid DGTX rewards while you trade.

March 31, 2021
Digitex Futures

March Market Wrap Up – Bitcoin and Ether

Digitex
March Market Wrap Up - Bitcoin and Ether 15

Historically, with the notable exception of ‘Black Thursday’ in 2020, March has been an uneventful month for cryptocurrencies. Yet, a lot has changed in 2021. Bitcoin (BTC) price shot above $60K on two separate occasions this March, and Ether (ETH) has made significant strides as well. Let’s take a look at the last 30 days in the life of BTC and ETH to see what factors influenced their behavior, as well as speculate on what may be coming as we move into a new month. 

Bitcoin (BTC)

March Market Wrap Up - Bitcoin and Ether 16

BTC began the month at around $47K facing some fairly strong headwinds the first few days of March in the shape of a widespread tech sell-off sparked by rising bond yields that tested all risk assets. The sell-off was short-lived with the bulls firmly back in control by March 9, as the yield market began to cool off. In fact, BTC went on to mark its all-time high above $61K by March 14.

Since then, we’ve seen a mixed bag from the number-one cryptocurrency which didn’t stay above the $60K barrier for long. Many analysts point to an inaccurate alert by South Korean blockchain analysis firm CryptoQuant about a huge impending whale dump on Gemini as the trigger for the correction. Others say that price corrections are expected and likely triggered by profit-taking around the psychological $60K level.

Either way, BTC rebounded once more and briefly reached above $60K again on March 20, trying its hardest to close out the month above $60K before falling back to around $58K on March 31 at the time of writing. So, what key events have affected BTC price this month?

Key Events in BTC in March

Apart from the rising yield in U.S. treasuries and a rebounding bond market which typically moves investors away from risk assets, most of the news surrounding BTC in March has been bullish. From the Goldman Sachs and Fidelity Bitcoin ETF filings to Tesla officially announcing that it now accepts payment for cars in BTC, is running its own node, and will be HODLing all the proceeds, March was anything but uneventful.

We had more institutional players announcing moves into Bitcoin, with both Morgan Stanley and JPMorgan offering BTC funds to their wealthiest clients. High-profile Norwegian oil and gas giant Aker ASA revealed the creation of a cryptocurrency arm with an opening $59 million investment, and MicroStrategy’s Michael Saylor (and other bullish investors) continued to buy the dip. 

We also saw a record $6 billion in BTC options expire that many believe will continue to send volatile shock waves through the market as we move into April. Yet, perhaps the most notable developments regarding Bitcoin fundamentals came during the last week of March, taking BTC from a low-point of near $50K to close to re-piercing the $60K barrier as payments giant PayPal announced that it would allow its U.S. customers to make purchases with crypto. 

That wasn’t the only news to give the crypto markets a shot in the arm, as Visa announced its first settlement on the Ethereum blockchain using USDC; a massive development that could serve as the bellwether for mainstream acceptance of crypto-native payment methods. In addition to that, CME announced yesterday that it will be launching micro BTC futures sized at one-tenth of a BTC from May.

All these developments, added to record highs in hashrate, open interest, miner revenue, and increased announcements from institutions definitely suggest more bullish action on the horizon for the months ahead. Added to that the Fed’s announcement about maintaining a loose monetary policy and the passing of a $1.9 trillion stimulus bill, and we have a perfect storm for hard assets. So, where will BTC price go next? 

Bloomberg Intelligence suggests that $400K at the end of the year is not an unrealistic target, while Stock-to-Flow proponent Plan B believes the bull run is just getting started. Trader and market analyst Michaël van de Poppe is looking at the nearer-term, calling for at least a $68K BTC in April — and a surge in altcoins as well. April is historically bullish for Bitcoin with only two bearish Aprils on record. Watch this space.

Ether (ETH)

March Market Wrap Up - Bitcoin and Ether 17

In many ways, the decentralized world computer and backbone of the growing DeFi economy, Ethereum, has had a tougher slog this month compared to BTC. A lot of the narrative in the first half of March surrounded Ethereum’s scaling issues with skyrocketing network fees and congestion problems.

Several competitors began flexing their muscles in the shape of Cardano, Solana, Algorand, Stellar, and Binance Smart Chain (BSC). In fact, Binance’s BNB became a top-three coin in February but was briefly ousted from the spot in March by Cardano’s ADA, touted by many to be an ‘Ethereum killer.’ 

ADA has since dropped several places down to fifth in the ranking since then, and, while there may be a lot of talk about toppling Ethereum, it’s just not that easy to hit network effect right off the bat. On-chain metrics suggest that competitors still have a very long way to go to catch up to Ethereum, which still has by far the largest developer community in the space, the most decentralized applications built on it, and is the enabler of the majority of DeFi projects and protocols. 

Moreover, Ethereum began to address its scaling problems in earnest, with Vitalik Buterin himself admitting that scalability was an urgent issue. He said that the solution was coming soon in the form of rollups that will see the mighty blockchain through until its transition to Proof of Stake and ETH 2.0. 

While ETH price didn’t recoup its all-time highs of above $2K set in February, it also rallied hard in keeping with BTC. And, with the news of Visa using its blockchain to settle payments, the rising NFT craze as Dapper Labs (the company behind CryptoKitties and NBA Topshot) raises $305 million from investors, and the increased popularity of DeFi ETH looks set to make another run at its $2K high any time now.

With the increased institutional interest in ETH, the upcoming Berlin hard fork in April which will go some ways to addressing high gas fees and making the Ethereum blockchain more robust, and increased announcements from Visa and other financial giants, ETH price looks set to have another record-breaking month in April.

Digitex (DGTX)

March Market Wrap Up - Bitcoin and Ether 18

The DGTX token, while still light years away from its all-time high and with a lot more to prove, has experienced its own rally in March, climbing back above 2 cents at its highest point on March 21, and ending the month up 222%. We have also more than doubled the number of new users on the exchange, increased liquidity, and tightened bid/ask spreads thanks to our new Liquidity Mining program on the exchange that pays you to trade, and made significant improvements to the UX/UI.

As we enter the second quarter of 2021, we look forward to more bullish developments. The launching of our zero-fee spot markets is our primary focus and we’ll be rolling out more key updates throughout the same period. 

During that time, be sure to take advantage of the gains to be made during this bull market and its massive volatility by trading BTC and ETH futures zero-fee on Digitex–getting paid DGTX rewards while you trade.

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