ETH bulls are building up more and more strength – is Ethereum about to break out of a 2-year bear market?

The crypto markets are holding steady after a slight retreat from their recent rally. Ethereum also still looks strong – but can the coin finally break out of its two-year bear market?

 

Ethereum bulls build strength

Since early 2020, Ethereum has outperformed Bitcoin. In just three weeks, the world’s second most popular crypto-asset has increased by 33%, while its big brother has “only” reached just over 20%.

Since the small retreat from the weekend, ETH prices have slowly risen, reaching $170 a few hours ago and holding steady.

The next major resistance point is just over 180 dollars, where the 200-day moving average is located – and beyond that the psychological 200 dollar mark.

If the current momentum continues, a golden cross between the 50-day moving average and the 200-day moving average could form by the end of January. The last time this happened was in early April 2019, followed by a 133% rise over the next two months.

Longer-term technical signals are also becoming bullish. The weekly MACD has crossed for the fourth time in history, as this ETH trader notes.

“Watch weekly closing prices to confirm them and maybe test them again in the coming weeks, but super bullish!”

Others join the mood, with the popular Twitter trader “Galaxy” commenting that Ethereum is on the verge of breaking out of its two-year bear market.

“$ETH is weeks away from breaking its two-year downward trend. There may be a bull signal next week. February is the starting month.”

Other Ethereum analysts are also expecting gains, with one aiming for $335. But first things first – and this is the $200 mark, which, if broken, will lead to a four-month high.

 

What role does DeFi play?

A few years ago, Ethereum’s primary use was to fund ICOs. After a worldwide regulatory collapse and its epic collapse in 2018, ETH was sold by the flooded markets in the millions.

The result was a two-year bear market in which Ethereum is still on the bottom at 87% below its all-time high.

Today, one of the fastest growing use cases for ETH is collateralisation in decentralised financial markets. According to defipulse.com, there is currently a record of 3.2 million ETH locked away in DeFi protocols – almost 3% of the total supply.

Ethereum is increasingly being used for decentralized bond and credit markets, which can generate far higher returns than any other bank.

As this industry grows, the demand for ether will follow – and that, coupled with Bitcoin’s momentum, could finally pull the digital stock out of its own crypto-winter.