Yerevan (CoinChapter.com) — Ethereum edged higher Wednesday after Tesla founder Elon Musk announced that they added Bitcoin as a payment option for its electric vehicles.
The “Technoking” said in a tweet early Wednesday that Tesla is going to operate an independent Bitcoin node, and will accept the cryptocurrency without relying on any centralized settlement services. Moreover, he guaranteed that Tesla will not exchange the Bitcoin proceeds for fiat currencies. The practice is common among merchants that want to accept the cryptocurrency without exposing themselves to its extreme price volatility.
The correlation efficiency between Bitcoin and Ethereum sits near 0.88. It means the benchmark cryptocurrency tends to directly influence its runner-up token. So it appears, Bitcoin and Ethereum showed a positive relationship throughout the Wednesday session. BTC/USD rose 6.88 percent and ETH/USD climbed 5.47 percent from their respective sessional lows in the same period.
ETH/USD reached an intraday high of $1,740 ahead of the New York opening bell before correcting lower due to short-term profit taking sentiment. The sell-off mood also resurfaced as the pair ventured into a resistance confluence area.
First, the $1,724-1,749 area, which served as a concrete support range throughout the March trading session, acted as a resistance. Second, a descending trendline that constitutes a Falling Wedge offered additional downside pressure to Ethereum’s upside attempt.
Meanwhile, the possibility of upside rejection appeared convincing.
As markets grapple with signs of economic recovery, amid a strengthening US dollar and rising bond yields, investors’ appetite for crypto-assets risked declining. Meanwhile, Ethereum traded near the Wedge resistance trendline, which increases its likelihood of rebounding towards the pattern’s support trendline near $1,659.
Conversely, a move above the Wedge’s upper trendline showed the potential of turning into a full-fledged breakout. Falling Wedges are bullish reversal patterns that typically shoot the price upwards equal to their maximum heights. That put ETH/USD en route to $1,820, bringing it near its previous record high of $2,041.42.
“The entire concept of Bitcoin decreasing on exchanges is similar to Ethereum,” said Michaël van de Poppe, pointing to an imminent supply crisis in the Ethereum market. “People are underestimating the potential of ETH in this regard. I’m looking to accumulate it heavily in the coming weeks and have been accumulating a portion already.”