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Ethereum’s Double Bottom: Skies Are Clearing. Is Crypto Spring in Sight?

  • Thomas Hughes
    ⭐ Features

    Ethereum is trading just shy of $90 after forming a double bottom and breaking above a bearish trend line that capped the ETH/USD pair for quite a long time


Ethereum’s Double Bottom: Skies Are Clearing. Is Crypto Spring in Sight?
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Let’s not get ahead of ourselves, don’t ditch your crypto winter clothes just yet… but ETH/USD has just printed a double bottom formation, which is usually seen at the end of a downtrend and is considered a strong bullish sign.

Apart from that, Ethereum has reached a key milestone of 50 million unique addresses according to Etherscan.io, which is impressive for any network, and maybe more interestingly, the growth hasn’t stopped during the dreadful 2018 crypto bear market. However, the number of active addresses represents only 0.46% of unique addresses, which is a huge drop from approximately 3.5% in January 2018.

Chart Analysis – ETH/USD

ETH/USD chart


At the time of writing, Ethereum is trading just shy of $90 after forming a double bottom and breaking above a bearish trend line that capped the pair for quite a long time. However, the break doesn’t seem to have strong momentum behind it (price moved sideways after the candle that broke the trend line).

For the break to have more chances of triggering an extended move up, we will need to see a move above the 50-period Exponential Moving Average (red line) and some stronger green candles (bullish).

The star of the chart is the double bottom formed on 83 support, and as long as that is holding, there’s an increased probability (emphasis on “probability”) of going closer to $100 per 1 ETH.

Support zone: 83

Resistance zone: 50 EMA and $100 in the longer term

Most likely scenario: break of 50 EMA, move into the key level at 100 (few days)

Alternative scenario: re-test of the double bottom formation

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Question of the Day: Can Stablecoins Accelerate Cryptocurrency Adoption?

  • Yuri Molchan
    ⭐ Features

    Stablecoins show hardly any volatility compared to Bitcoin and altcoins, many are hoping that they will be able to bridge new crypto economy and regular fiat money


Question of the Day: Can Stablecoins Accelerate Cryptocurrency Adoption?
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Contents

Bitcoin, the father cryptocurrency, emerged in hope that it will remove all intermediaries in electronic commerce that cut off their share of payments. BTC was perceived as a P2P way to replace fiat cash in an electronic format, which would enable one party to pay another without any financial institution or payment platform which would demand its share of a transaction as a reward for its services.

What is wrong with Bitcoin

For quite a while Bitcoin was performing the way the crypto community expected. But the situation changed later – BTC rate became weaker, thus bringing down its financial and economic reliability, when it gets to be used as a regular means of payment.


You cannot have a currency that would cost like a British castle today, a gram of gold – tomorrow and a pack of French fries the day after.

At that point practical fintech minds came up with an idea of creating something which would become a breakthrough in the universe of crypto – a so-called stablecoin.

Will stablecoins solve the volatility problem?

Technically, stablecoins are protected from the volatility roller-coaster that Bitcoin and other cryptos love to ride. They are programmed to keep their prices stable and investors now are largely attracted to this new type of digital assets.

Stablecoin does not show any volatility in its monetary value, since it has a fixed connection to an asset it is pegged to. The major goal of using stablecoins is taking the best from decentralized crypto coins and combining it with a constant value. Thanks to it, stablecoins can be used as a reliable means of trade.

Asset-pegged stablecoins

Asset-backed ones get their value from an asset as can be understood from the name. An asset provides the necessary value to a coin, as well as the necessary legitimacy.

A great example of an asset-pegged stablecoin is Tether (USDT). In spite of a series of scandals at the end of last year, it remains the most popular stablecoin in the crypto market.

Recently, it has partnered with the Tron Foundation to launch a Tron-based stablecoin.

Other examples are TrueUSD (TUSD), USD Coin (USDC), the Gemini Dollar (GUSD), and the Paxos Standard (PAX). They are all pegged to the USD.

Crypto-backed stablecoins

Some digital coins work in a similar way to fiat-backed ones, however, they are pegged to collateral crypto. That means that crypto assets that ensure the value of such stablecoins are stored in a wallet similar to escrow.

A good example of a crypto-pegged token is Maker, which is ranked 16 on CMC.

Algorithmic stablecoins

Even though, stablecoin can be interesting at first thought but the way they are built goes against the principle of decentralization that crypto coins have as a foundation. Thus, many crypto fans and evangelists are positive that stablecoins must be linked towards not a centralized asset but a computer algorithm which takes value from a balance between supply and demand.

Basis is now considered the most promising algorithmic stablecoin of all.

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Can stablecoin ensure smooth future for the crypto industry?

The primary goal of all crypto assets was and remains to come up with virtual asset that would be liquid enough and not vulnerable to market volatility. From this point of view, stablecoins are a dream of all crypto fans and evangelists of a decentralized economy.

Apart from the potential to conduct crypto transactions smoothly, experts believe it can bridge the two worlds – fiat and crypto, bringing them a mutually beneficial coexistence. However, that may take time.

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