Ether, the de facto settlement sign of the Ethereum blockchain, rebounded on Monday after global payments giant Visa became the ledger’s youngest supporter.
The company, which can process 24,000 transactions per second, announced that it will offer users the ability to process transactions in Ethereum-based stablecoin USDC. The company was the first large payment service provider to integrate a dollar-pegged cryptocurrency into its legacy systems.
Crypto.com has joined Visa to facilitate its stable, coin-centric pilot program. In this way, the crypto company would allow Visa to get involved with their physical cards, which would give them the privilege of processing transactions in USDC in addition to fiat currencies. The partnership would eliminate the need for users to perform additional asset conversions.
“Today’s announcement marks an important milestone in our ability to meet the needs of fintechs managing their business in a stable coin or cryptocurrency,” said Jack Forestell, Visa chief product officer. “And it really is an extension of our day-to-day work, making payments in all different currencies around the world safely easier.”
Visa’s move came after it pulled out of a similar stablecoin project launched by social media giant Facebook. The company decided against integrating “Libra” after Mark Zuckerberg’s foray into the cryptocurrency sector met with skepticism from lawmakers and regulators alike.
ETH / USD rise
Ethereum (also known as Ether) rose more than 5 percent in its early London session, hitting an intraday high of $ 1,782. Part of its gains were due to its positive correlation with Bitcoin, the highest cryptocurrency, which also surged above a key resistance level of $ 58,000 on Monday. Meanwhile, after the Visa news, there was more tailwind for Ethereum.
Ethereum’s uptrend is picking up pace after the Visa news. Source: ETHUSD on TradingView.com
The Ethereum blockchain supports 74 percent of all stablecoins available on the market, compared to only half of the dollar-linked tokens last year. More than $ 1 trillion in stablecoins were processed in 2020, with Tether, the most popular but controversial digital dollar, processing $ 580 billion in transfers and $ 385 billion on the Ethereum blockchain generated.
As usual, miners benefited most from the growth of Ethereum as the public ledger for stablecoins and a dozen other industries, including the booming decentralized financial sector. Ethereum’s mining revenues in January 2021 were $ 830 million, the highest on the calendar. This in turn increased the incentive for Ether among investors.
Visa’s involvement in an Ethereum-backed stablecoin increased the blockchain’s ability to attract more users to its platform. This partly explains the rise during Monday’s European session.
Technical outlook for Ethereum
ETH / USD is now trading within a symmetrical triangle channel, which is confirmed by at least two reactive highs on a downtrend trendline and two reactive lows on an upside trendline. Coupled with decreasing trading volume, the pair intends to log a breakout move as it approaches the vertex of the triangle – the point where the two trendlines converge.
Ethereum is observing a breakout of the symmetrical triangle. Source: ETHUSD on TradingView.com
For now, it appears that ETH / USD is breaking bullishly targeting a range above $ 1,950 to $ 2,050. Meanwhile, an upward rejection of the upper trendline of the triangle would mean a retreat towards the lower trendline followed by a negative breakout towards the USD 1,350-1,470 support area.
Photo by Nick Chong on Unsplash