Ethereum’s price has been going through a frustrating consolidation period over the past few months following the price’s failure to break above the $4,000 resistance level.
How to read Ethereum (ETH) Charts?
There are various software solutions and trading tools used to gauge the price of Ethereum on a chart, but the most common one is undoubtedly through a chart with Japanese candlesticks. Every candlestick is a visual representation of a time frame - it can be a second, a minute, an hour, a day, a week, a month, or even a year. Each candle provides specific information, which includes the opening price, the current price, the closing price (the price at which the candle was closed and a new one appeared on the chart), as well as the highest and the lowest point of the price reached during that time frame. In addition to simply looking at the candles, most charting tools also provide additional instruments such as moving average trendlines, Fibonacci retracement levels, Relative Strength Index (RSI), and more.
What affects the price of Ethereum (ETH)?
Cryptocurrencies traded on the open market are much like any other asset traders can access on an exchange. ETH - the native cryptocurrency of the Ethereum protocol - is no exception. Its price can be affected by many factors that can be categorized into two. First, there are internal considerations specific to Ethereum. For example, positive developments associated with the protocol can boost the price of ETH, while negative developments can lead to a decline. On the other hand, there are also external factors. For example, many altcoins, including ETH, are affected by Bitcoin price fluctuations. Therefore, if BTC goes into a parabolic bull run, this usually leads to increased investments and inflows into the altcoin sector, positively impacting ETH’s price and vice-versa.
What are Ethereum (ETH) price predictions based on?
ETH price predictions aim to accurately determine the trajectory of the asset for a predetermined future period. They tend to be made by analysts and industry experts who base them on a variety of criteria, including but not limited to past performance. Historical trends are typically the most common foundation for price predictions - by analyzing how ETH performed during certain events in the past, experts are attempting to predict how it might perform in the future, given that the same or similar conditions are met.
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