Ethereum Market Update: ETH/USD nurtures the breakout above $170

Ethereum is trading within a whisker of the January 2020 peak. This follows an impressive bullish reversal from the pullback experienced last week. The downtrend from highs around $179 found support at $155 - $157 (key support zone). High buying power at this zone coupled with an improved technical picture placed Ethereum price back in the trajectory targeting $200.

At the time of writing, Ethereum is trading at $172.95 while testing an ascending channel resistance. The value of the crypto has grown 1.8% on Tuesday after opening the session at $169.94.

Ethereum looks stronger than ever: Vitalik Buterin

In response to a popular cryptocurrency personality on Twitter, Whale Crypto Investor, who wrote, “Ethereum is bleeding every day. Where's the Old strong Ethereum? I wonder if he won't get back to his old days,” the co-founder of Ethereum Vitalik Buterin said that Ethereum is “looking stronger than ever to me!”

In addition to that as the decentralized financed (DeFi) sector picks up the pace, Ethereum’s supply is said to be decreasing. Some of the fasted growing applications are coming in the form of lending and borrowing apps that run on the Ethereum network. According to Omar Bham (Crypt0) “Bitcoin maximalists don't want you to know. Supply for ETH is shrinking, as DeFi apps locking it up are driving demand. There will probably be less ETH available on markets, come next bull run.”

Ethereum price technical picture

The run towards $200 appears to be taking a breather above the former resistance now short term support at $170. The immediate downside is protected by an accelerated trendline (dotted) while the channel support will come in handy later. The 50 SMA at $166 on the 1-hour chart and the 100 SMA at $163.43 will also offer support if a reversal ensues. The RSI shows ETH bulls are still largely in control, however, consolidation is expected above $170 before the next rally towards $200.

ETH/USD 1-hour chart