Hidden reason for Ethereum strength?
I want to quickly dissect the technical picture of ETH/USD and also shine light on another reason that may be contributing to the ETH/USD strength.
In my last post I talked about the 248–266 zone we were in and how we needed to see the support taken out to the downside and/or we needed to see a rally back past 266 in order to remain bullish. We got both of those outcomes.
After showing some weakness ETH/USD dove down below our support area to touch 244 but then quickly bounced back above (a good sign) and completed the charge to re-take 266. This is very constructive price action and effectively shuts down the technical damage for now. I’m holding my ETH/USD in my long term account and doing nothing here in the short term. The only move was to re-enter long after stabilized back above 250 and took out 266.
Lets talk about an often overlooked fundamental reason why ETH/USD is so strong. The Chinese government has made it hard to get money out of the country fueling real estate booms in San Francisco and Vancouver but maybe also helping to explain the persistent bid in BTC and especially ETH. You can withdraw substantially more ETH from China than any other crypto asset thus making it a great vehicle to move wealth. How much of an impact this plays is anyone’s guess but it’s a very important factor to keep an eye on.
Stay long and don’t short for now, more to come as the price action and fundamentals change.