FILE PHOTO: Representation of the Ethereum virtual currency standing on the PC motherboard are seen in this illustration picture, February 3, 2018. REUTERS/Dado Ruvic/Illustration/File Photo
Ether has outstripped bitcoin in 2021.

Thomson Reuters

  • Ether shot to a record high close to $3,500 on Tuesday before paring some of those gains.
  • The cryptocurrency has outstripped bitcoin in 2021, with investors keen on the Ethereum network.
  • Analysts said ether could shoot up to $5,200 before facing resistance, according to historic trends.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Ether jumped to a record high of close to $3,500 on Tuesday as interest in the world's second-biggest cryptocurrency continued to grow, while bitcoin struggled.

Analysts at the Kraken exchange said there was a lot of momentum behind ether and that technical chart analysis suggested the cryptocurrency could rise to around $5,200 before facing another serious level of resistance.

Ether rose 6.7% on Tuesday to $3,381.20 as of 6.20 a.m. ET time, according to CoinGecko. It had earlier hit an all-time high of $3,446.90 after rising more than 33% over seven days.

The native currency of the Ethereum blockchain network has been on a hot streak in recent weeks while bitcoin - the world's biggest cryptocurrency - has stumbled. Ether's year-to-date gain stood at 357% on Tuesday, compared to bitcoin's 93% rise.

Many investors are increasingly keen on ether and the Ethereum network because applications such as non-fungible tokens, or NFTs, can be built upon it. Ethereum is also central to decentralized finance or DeFi, a movement to use blockchain technology to cut out the need for central parties such as banks in financial contracts.

"Compared to its bigger rival, Ethereum is more scalable, offers more uses and solutions, such as smart contracts which are already used across many sectors, and is backed with superior blockchain technology," Nigel Green, chief executive of financial consultancy deVere Group said.

Kraken's analysts said technical analysis suggested ether had further to rise in the medium term before running into more resistance.

Based on historical trends, "ETH's next big test of resistance is currently at $5,240, while support resides around $2,811," they said in a note on Tuesday.

The analysts also said ether's market share of the crypto world remained relatively unchanged over the past month at around 13.5%.

"Such suggests that ETH has plenty of room to run higher and has yet to enter into a parabolic uptrend akin to 2017 and earlier this year," they said.

Read the original article on Business Insider