Ethereum Surges to Record Highs: As for Fundamental Causes... it's "Game" Over
The GameStop fiasco did not spark Ether's rally; see the Elliott wave pattern that did.
by Nico Isaac
Updated: February 04, 2021
Cryptocurrencies are well-known as hot-potato markets with volatile price swings. Most investors and traders see cryptos as "catch-and-release" - vs. - "buy-and-hold."
But this chart tells a somewhat different story. It not only shows that the #1 top performing cryptocurrency for 2020 and (so far) 2021 is #2 in line: Ethereum. But it also shows that, after trending sideways from August through October, ETH held and continued to hold the upside in a powerful rally to record highs on February 3.
The clamor to find "a reason" for Ethereum's surge was short-lived, thanks to the event cited in countless news stories regarding moves in nearly all financial markets so far in 2021: namely, the GameStop fiasco.
In case you've been on a stranded island and don't know what I'm referring to, the short version of the fiasco goes like this: Members of the subreddit r/WallStreetBets bought up and talked up shares of the all-but-flatlined GameStop (GME) company (retail seller of video games) AFTER a major hedge fund manager called GME buyers "suckers."
This led to a short squeeze of Wall Street investment firms, two manic weeks of price swings, retaliatory trading restriction on the part of online brokerage apps -- AND a supposed spill-over in markets across the swath, including cryptos such as Ethereum, of which these headlines directly speak:
- "Ethereum Price Predictions: Will ETH Set a New Record After Reddit Rally?" (Feb. 2 Investorplace)
- "Cryptocurrency sees boost in popularity following GameStop Stock incident" (Feb. 1 BigCountry Homepage)
- "Ether Cryptocurrency Reaches Record High, Briefly Tops $1.5K Amid WSB Trading Buzz" (Feb. 2 Coindesk
Said the February 2 Coindesk article:
"Ethereum's ether (ETH) cryptocurrency logged a new record high on Tuesday, amid expectations the recent GameStop (GME) trading saga would accelerate the adoption of cryptocurrencies and decentralized finance (DeFi).
"With investment and trading platform Robinhood halting trading of certain assets like GameStop... the case for cryptocurrencies only grows stronger."
But here's what this explanation fails to consider: The GameStop "price war" began in mid-January. Yet, Ethereum's uptrend has been steadily underway since mid-November.
In turn, the case for cryptos, and Ethereum specifically, grew stronger long BEFORE a little-known Reddit forum launched a war against Wall Street. In our November 13 Crypto Pro Service, in fact, we showed a the following chart of Ethereum which made that very, bullish case. It showed prices at the start of a third-of-a-third wave rally and said:
"We are looking for a break above 488.12 as the next key level to bolster the case that we are indeed subdividing further within this wave three of three pattern."
From there, Ethereum gathered strength and on December 3, our Crypto Pro Service said the crypto was on its way to setting new records.
"Pushing above the wave B high at 834.04 is the next objective for the bulls and from there then we would expect Ethereum to register all-time new highs [above 1419] as the third wave forecast calls for significant gains over the next several weeks."
Now that Ethereum has set those new records, the question becomes: Is Ether's winning streak over?
Our Crypto Pro Service has the answer right now, with in-depth analysis of the crypto's intraday, daily, and weekly price trends. Don't absorb the shock of the market's next move -- arrive at those moves in advance with our premier, Crypto Pro Service.
The Markets are Black and Blue and Reddit All Over
So -- it wasn't GameStop that sparked Ethereum's surge after all.
But make no mistake... there will be another "silver bullet" fiasco cited after-the-fact that supposedly caused Ethereum and its cryptocurrency peers to soar or plunge.
But if you want to arrive at those moves in advance, our Crypto Pro Service presents top-shelf analysis, video updates, and labeled price charts that give traders all the critical details to identify high-confident set-ups and manage risk along the way.
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