Etheruem has completed one big technical lap, can it complete another?
Ethereum is up 7% today as it reaches an important technical target, completely wiping out the June loss. In late July it took a run at the $1800 level but fell just short. After a retracement to $1550 it re-gathered momentum and completed the job today.
I wrote about this chart at $1200 and how it was showing positive signs then.
It's now doubled from the June spike low at the time of the implosion of several crypto-lending platforms. The bad news is the space has essentially slowed to a trickle and that's slowly breathed life into ethereum.
Perhaps an even bigger driver -- and the chief reason it's outperforming bitcoin -- is the Merge. It's a fundamental reconfiguration of ethereum that changes it to a proof-of-stake mechanism from proof-of-work. That will lower the energy consumption by 99.9% and will be a platform for upgrades to come.
The flexibility of ETH -- in contrast to the immuntability of bitcoin -- is a philosophical test of what 'technology' really is. Bitcoin absolutists like the idea that it can't be changed and that may be a better argument for why it's a store of value but ethereum bulls aim to make it the most-useful blockchain and that has real value.
Ultiamtely, there doesn't need to be a 'winner' but lately ETHUSD has certainly been the better investment.
Looking ahead, it's a lot to ask to take a run at the May drop right away. Expect some consolidation around these levels and for the broader risk mood to dictate the next move. With meme stocks ripping once again, there's money coming in from the sidelines but all this optimism is going to give the Fed another reason to ramp up rates by 75 basis points in September.
