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Why Ethereum Is Primed to Move Higher Despite Drop From $460 Highs

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  • Ethereum has faced a drop since the $465 highs it reached last week when Bitcoin broke toward $16,000.
  • ETH trades for $445 as of this article’s writing.
  • Still, analysts remain confident in the cryptocurrency despite the recent price weakness.
  • This is due to a confluence of both technical and fundamental signals for the second-largest crypto-asset by market capitalization.

Ethereum Could Push Toward $500

Ethereum has faced a drop since the $465 highs it reached last week when Bitcoin broke toward $16,000. ETH currently trades for $445, far from the lows of the retracement set last week but far from the highs.

Analysts remain confident in the cryptocurrency despite the recent price weakness. This is due to a confluence of both technical and fundamental signals for the second-largest crypto-asset by market capitalization.

ETH is up 0.1% in the past 24 hours as bulls try and reclaim some ground after a drop.

One crypto-asset analyst shared this chart below in the wake of the drop, noting how Ethereum remains bullish on a medium-term time frame. The chart shows that the cryptocurrency’s recent price action is actually a breakout past a critical resistance level, then a subsequent retest of that level as support. It is far from a perfect retest, though indicates that Ethereum could continue its ascent to the upside in the near future.

The resistance level that Ethereum just tested as support is one of a critical importance for bulls.

As can be seen below, the level marked the initial highs of the summer rally, then also marked the point at which that the late-August and early-September correction picked up steam.

This precedent suggests that since Ethereum confirmed that level as support, it will be primed to move toward $500 in the weeks ahead.

Chart of ETH's price action over the past few months on a daily scale from crypto trader and asset analyst Income Sharks (@Incomesharks on Twitter)
Source: ETHUSD from TradingView.com

As reported by Bitcoinist previously, a trader recently pointed to five signs indicating that Ethereum could soon move higher against Bitcoin. The chart seen below was shared to encapsulate this belief.

Image

Chart of ETH's price action against Bitcoin over the past few weeks with analysis by crypto trader "Steve" (@Thetradingtramp on Twitter).
Source: ETHBTC from TradingView.com

All Eyes on Bitcoin

Although Ethereum may be in a technical position to rally, its price action is dictated largely by Bitcoin at the end of the day.

Fortunately for Ethereum bulls, analysts are confident that Bitcoin will continue its move higher in the days ahead. They point to the strong weekly candle close above $14,000, which establishes it as support.

Featured Image from Shutterstock
Price tags: ethusd, ethbtc
Charts from TradingView.com
Why Ethereum Is Primed to Move Higher Despite Drop From $460 Highs





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Ethereum

Bank of Israel steps up CBDC efforts with reported tests on Ethereum

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Israel’s central bank has allegedly completed a pilot — under the radar — for a central bank digital currency (CBDC) using Ethereum’s technology. The claim was made by the Israeli financial news site Globes and later reported by BNN Bloomberg.

Globes’ sources for its claims are not disclosed: the report alleged that the Bank of Israel (BOI) completed its pilot in an experimental, closed environment based on Ethereum’s architecture, involving the trial issuance of tokens representing digital shekels and their transfer between digital wallets. 

Globes also claimed that as part of its pilot, the BOI successfully tested its ability to program a car ownership certificate transfer using nonfungible digital tokens (NFTs) and completed a transaction wherein NFT payment was made the condition of the certificate’s transfer and vice versa. The transaction was instantaneous without any risk or need for a central intermediary or trustee.

This application, the report stated, represents just one possible example of what payment services providers, tasked with providing digital wallets for the public, could be able to build. The BOI has reportedly asked industry actors to propose various smart applications that could prospectively be built upon the infrastructure of a future digital shekel.

Globes however contended that, broadly speaking, the central bank has not been forthcoming about its current experimental CBDC research. As reported by Cointelegraph, the BOI’s deputy governor only revealed that a preliminary CBDC pilot was in fact already being conducted during a discussion held at the Fair Value Forum at Herzeliya IDC earlier this month. 

Globes characterized the deputy governor’s concession as the result of his having been “pushed into a corner” and criticized the central bank for not reaching out to local industry sufficiently as it begins to investigate the highly complex issue of CBDCs.

The BOI did, however, publish an in-depth report last month outlining its analysis and examination of various alternatives and models for a prospective CBDC, all the while emphasizing that the document and its proposed draft CBDC model was only meant to serve as a basis for discussion, not as a blueprint: 

”This draft does not represent a decision of the Bank of Israel regarding the characteristics of the digital shekel, if issued. The draft model forms the basis for discussion and examination of alternatives by the working teams dealing with the issue at the Bank of Israel, and, following the publication of this document, it will also serve as a basis for discussion in the professional community in Israel about the characteristics required for the digital shekel.”

Related: Israel’s central bank floats possible digital shekel with new action plan

This engagement with CBDCs signals renewed momentum and interest in CBDCs at the institution, after a team led by former governor Dr. Karnit Flug had recommended against issuing a digital shekel in late 2018. 

While the BOI’s report from May makes no mention of Ethereum, it does note that “the various opportunities that a digital shekel could offer for the innovation of the payments system in the Israeli economy include smart contracts, programmable money, and the like.”

Nor does the BOI’s report from May make any mention of either smart applications or NFTs. It does, however, note the possible benefits of using distributed ledger technologies as compared to existing, centralized technologies, for different parts of the digital shekel ecosystem. 

The bank’s report also stressed the interdependence of developments in digital identity technologies and CBDCs and pointed to the benefits of conducting proofs-of-concept that could help the institution to gauge the relevance, risks and benefits of a digital shekel for the Israeli economy at large.