Ethereum price made a bullish breakout on Friday as cryptocurrency prices rebound. The ETH coin rose to a high of $3,825, which was the highest level since September 7. This rally brought its total market capitalization to more than $450 billion.
Why is ETH is rebounding?
There are several reasons why Ethereum price is rebounding. First, the rally is part of its close correlation with Bitcoin.
As I wrote earlier, the Bitcoin price has jumped sharply in the past few days because of the rising hopes that the Securities and Exchange Commission (SEC) will give a go-ahead to an ETF as soon as Monday. Analysts believe that an Ethereum ETF will come next if the agency gives a go-ahead on Bitcoin’s fund.
Second, ETH is also rising because of its correlation with stocks. Stocks have jumped sharply in the past few days as investors ignore the rising risks in the market. Some of these risks are on the relatively high energy prices and logistics challenges. Instead, investors have cheered the relatively higher corporate earnings from companies like JP Morgan, Morgan Stanley, and Goldman Sachs.
Third, Ethereum price is rebounding because of the strong performance of the Decentralized Finance (DeFi) industry. Data compiled by DeFi Llama show that all Ethereum non-fungible tokens (NFTs) have grown their total value locked (TVL) to more than $150 billion.
The DeFi Llama data is usually more accurate than the one offered by DeFi Pulse because it includes more tokens. Data by DeFi Pulse places the total TVL at more than $96 billion. These numbers are substantial since the industry was not inexistent a few years ago.
Fourth, the ETH price has jumped because of the significant growth of the Non-Fungible Tokens (NFT) industry. Recent data show that assets worth billions of dollars have already been traded in key marketplaces this year. This is notable since most of NFT projects are built using Ethereum’s technology.
Ethereum price prediction
The daily chart shows that the ETH price has made a major bullish comeback lately. It has risen by more than 43% above its lowest level in September. It is now approaching the key resistance level at $4,015, which was the highest level in September. It has moved above the 25-day and 50-day moving averages.
Therefore, at this point, the pair seems to be forming a double-top pattern whose upper part is at $4,015. If this pattern happens, there is a likelihood that it will stage a major bearish breakout. However, a move above that resistance will mean that bulls have prevailed. This will see it rise to the all-time high of $4,365.
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