Ethereum Hits Five-Month Highs as Support for Altcoins Grows

Ethereum trekked higher on Thursday, with prices crossing $380 for the first time since the summer. The recent up move has lacked any major fundamental catalysts, and appears to be driven largely by technical trading and improved investor appetite for all things cryptocurrency.

ETH/USD Price Levels

Ether traded as high as $383 U.S. on Thursday before later consolidating right around the $381 level for a daily gain of roughly 2.7%. At current levels, Ethereum’s total market cap is valued at $36.4 billion.

The world’s no. 2 cryptocurrency by market cap is trading at its highest level in over five months. Prices appear to have caught a tailwind in mid-November, right around the time that the backers of the Segwit2x bitcoin hard fork abandoned their plans to split the original blockchain.

ETH/USD faces immediate support near the $355-$360 level. On the opposite side of the ledger, markets are eyeing all-time highs above $400. Market participants can continue to expect strong resistance at this psychological level. Ether is also susceptible to overbought resistance, with the Relative Strength Index (RSI) grinding toward 70.

Ether tokens have added nearly 16% over the past five days, and are fast approaching all-tim ehighs near $396.

Despite recent gains, Ethereum has been no match for bitcoin. The original cryptocurrency surged past $8,000 this week en route to new record highs. As such, the ETH/BTC exchange rate recently found itself hovering near multi-week lows. Prices were last seen at 0.04623 for a gain of 2%. This cross has tumbled more than 43% over the past month.

With talks of $10,000 bitcoin, the ETH/BTC cross will likely face stronger headwinds in the immediate term.

Tether Controversy

Ethereum and other cryptos took a mild hit earlier this week after Tether announced a $31 million cyber breach. The heist occurred on Nov. 19 when a hacker diverted funds to an unauthorized bitcoin address. Tether has not yet been able to retrieve the funds, but it has campaigned hard to get other exchanges to blacklist the wallet address associated with the heist.

Although Tether has nowhere near the same credibility as bitcoin or Ethereum, news of any cyber attack tends to weigh on the broader market.

Ethereum wallets are constantly under attack, with Parity Technologies being the most recent example. The leading Ethereum developer apparently froze more than $190 million worth of funds because of a novice hacker. A total of 587 multi-signature wallets were compromised and a total of 513,774.16 ether were frozen.

Ethereum-based Derivatives?

Talks of Ethereum derivatives were in the news on Wednesday after Banca IM released a whitepaper detailing how an ether smart contract could be used for evaluating default risk. Banca IM, a subsidiary of Intesa Sanpaolo, believes the future of the quadrillion-dollar derivatives market may be conceived on the blockchain.

In the whitepaper, author Massimo Morino argues that the blockchain can boost transparency in the derivatives market.

He says:

“The fundamental idea is to perform a change — a reform if you want — of the business model of financial derivatives to exploit in the best way the technology of the blockchain to get derivatives which are more transparent, which are more secure.”

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi