EtherLite Must Attract More Traders To Gain Traction
EtherLite is a hard fork of Ethereum which has began to trade on exchanges this summer. Often, such projects benefit from the popularity of the original project as traders rush to buy all coins that look “similar” to the original coin, sometimes without digging deep into fundamentals and relying solely on hype.
However, Ethereum’s popularity failed to provide any support to EtherLite in recent weeks. Ethereum has recently managed to settle above the resistance at $3,775 and moved towards the psycologically important $4,000 level. Ethereum has already made several attempts to settle above $4,000 but failed to develop sufficient upside momentum.
Meanwhile, Bitcoin managed to get above the key resistance level at $50,000 and is testing the next resistance at $51,500. A move above this level should provide broad support to crypto markets, but it remains to be seen whether it will help EtherLite which suffers from lack of popularity.
The market for EtherLite is fragmented and trading volume is low, so it’s hard to talk about significant technical levels. At the same time, it should be noted that EtherLite is trading close to a material support level, and a move below this level may trigger and additional sell-off, although it remains to be seen whether there is a sufficient number of active traders to make fast moves possible.
EtherLite project needs to attract more traders to have a chance to gain upside momentum. At this point, the trading volume is so low that it cannot attract a sufficient number of speculators who prefer more established coins. This is true for hundreds of similar projects that fight for traders’ attention – if they cannot attract some “critical mass” of trading volume, they fail.
In this environment, Ethereum’s strength may even serve as a bearish catalyst for EtherLite as traders have no reason to prefer the illiquid coin to an established and highly liquid project which is racing towards its all-time high levels.
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