Ether prices bounced back today. (Photo by Jordan Mansfield/Getty Images)
Ether prices climbed today, causing the digital currency to recoup all the losses it suffered yesterday when it fell back from the steady, upward trend of the last several weeks.
The digital currency, the second-largest by market value, rose to as much as $1,639.60 around 5 p.m. EST, CoinDesk data shows.
At this point, the digital asset had appreciated more than 8% in the space of 24 hours, experiencing a notable rally after after approaching $1,520 last night, additional CoinDesk figures reveal.
[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.]
Profit Taking
Several analysts attributed yesterday’s losses to investors taking profits after the cryptocurrency rallied more than 35% since the start of the year.
When asked whether ether’s recent declines were the result of investors cashing in on these gains, Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital, offered the following reply via email:
“Yes, both BTC and Ether faced corrections in the last 24 hours, mostly because the preceding rally had gone on longer than most participants were expecting, and had begun to show signs of exhaustion,” he stated.
Marc Bernegger, cofounder of crypto fund of funds AltAlpha Digital, also spoke to the matter, offering his insight via emailed comments.
“As many traders and hedge funds had a stellar performance this month so far, it is not unusual to take some chips from the table and realize these profits,” said the analyst.
After ether started declining yesterday, it fell toward $1,500, which DiPasquale described as a crucial level of support, before proceeding to recover.
Ether’s Outlook
To get a better sense of the trend ether will follow going forward, DiPasquale encouraged traders to monitor the digital currency’s price, as well as how it responds to key economic developments, over the next several days.
He noted that in the next week or so, investors will receive updates regarding inflation, GDP and the policy decisions of the Federal Reserve.
Tim Enneking, managing director of Digital Capital Management, also spoke to ether’s outlook, offering a different perspective on the situation.
He stated that “ETH has underperformed BTC this year rather significantly, perhaps as best illustrated by the fact that BTC dominance has increased from almost exactly 40% at the beginning of the year to 42.5% now, while ETH’s share of market cap is virtually unchanged.”
The analyst expressed doubts about the market’s ability to determine ether’s price in an appropriate manner.
“It seems to me that there is still uncertainty in the market as to how to accurately price ETH after the ‘Merge’ and shift from PoW to PoS,” he stated.
“Further, given the growing concentration of ETH in the hands of large staking consortia, the approach to ETH may well be shifting from ‘appreciation/speculation’ to ‘preservation/income,’” Enneking added.
“If true, that would mean that the current trend of underperformance relative to BTC will continue.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.
