Technical Analysis of ETH/USD for January 6, 2021

Crypto Industry News:

Grayscale Investments, the world's largest cryptocurrency asset management company, announced on Tuesday that it had liquidated its XRP holdings and used the remaining funds to buy more Bitcoin, Bitcoin Cash and Litecoin.

The decision concerns the Digital Large Cap Fund, assets that provide exposure to the largest cryptocurrencies by market capitalization. The sale of XRP took place on Monday, less than a week after Genesis Global Trading, an authorized participant in the fund, announced that it would soon temporarily suspend XRP trading, possibly in connection with a lawsuit filed by the US Securities and Exchange Commission against Ripple. Genesis Global Trading plans to put all XRP trading on hold on January 15th.

Prior to the sale, XRP represented approximately 1.46% of the Digital Large Cap Fund. The fund's components are currently 81.63% BTC, 15.86% ETH, 1.08% BCH and 1.43% LTC.

The company said XRP was "removed after the DLC's quarterly fund review (12/31/20)" and explained that no other assets are eligible for inclusion in the fund. Assets managed by Grayscale recently eclipsed $ 20bn for the first time, highlighting broad institutional demand for Bitcoin and other digital assets. The asset manager collects Bitcoin in greater quantities - at least one indicator shows that Grayscale bought almost three times more BTC than it was mined in December.

While XRP has been one of the few large-cap cryptocurrencies that have appreciated in recent months, the outlook still looks uncomfortable with a wave of stock market withdrawals in the United States.

Technical Market Outlook:

The ETH/USD pair has been bouncing from the short-term trend line, which indicates that another wave up might start soon. The battle for $1,000 was won by bulls and currently the market is trading around the level of $1,100. The up trend is being continued and there is no sign of trend reversal. Moreover, the up trend is now going parabolic and the next mid-term target for bulls is seen at the level of $1,420. The nearest technical support is seen at the level of $1,000 and $976. Please notice, the level of $1,000 is very close to the 161% Fibonacci extension level of the main wave 1, located at $1,047.

Weekly Pivot Points:

WR3 - $1,394

WR2 - $1,185

WR1 - $1,086

Weekly Pivot - $847

WS1 - $791

WS2 - $545

WS3 - $496

Trading Recommendations:

The up trend on the Ethereum continues and the next long term target for ETH/USD is seen at the level of $1,420, so any correction or local pull-back should be used to open the buy orders. Please notice, the up trend starting to go vertical, so the volatility will be higher than average. The bullish scenario is valid as long as the level of $830 is broken.

analytics5ff56412a27f4.jpg

The material has been provided by InstaForex Company - www.instaforex.com