- Chinese tech giant Meitu bought $ 28 million worth of ether through its subsidiary.
- Although the most recent accumulation was a second installment, the price of Meitu stock was unaffected.
- ETH investors seem to be holding their own even if the Ethereum price has fallen.
Meitu, a Hong Kong-based tech company, announced on Wednesday that it had acquired 16,000 ETH and 386 BTC. The second tranche of the investment totaled 50 million US dollars and came through Meitu subsidiary Miracle Vision.
Meitu acquires $ 28 million worth of ether
Considering Meitus’ previous ether Purchase, which cost $ 22.1 million for 15,000 ETH, the software company now owns a total of 31,000 ETH. That investment has already generated a profit of $ 6 million, or 10%, at the time of writing.
Regarding its full-fledged investment in cryptocurrencies, the company said its decision was partly driven by the surge in Money supply from central banks worldwide.
The Board of Directors believes that the blockchain industry is still at an early stage, analogous to the mobile internet industry around 2005. With this in mind, the Board of Directors believes that cryptocurrencies have plenty of room for appreciation and by allocating part of their treasury in cryptocurrencies also serve as diversification for holding cash.
While Meitu was one of the first companies in the east to follow Tesla, Square and MicroStrategy, more such announcements could follow, especially given the important milestones surrounding the smart contracts platform.
The first significant step is the change from Proof-of-Work (PoW) to Proof-of-Stake (PoS). While this topic was initially controversial, the number of tokens accumulated in the ETH 2.0 deposit contract has now reached a staggering 3.5 million, valued at 6.4 billion US dollars.
In addition, the recently launched Ether Futures on the Chicago Mercantile Exchange (CME) have also traded 695,550 ETH contracts so far, showing that investors are interested in the smart contracts platform token and its bullish potential.
Ethereum price is preparing for another test of $ 2,000
Ethereum price has formed a series of higher highs and higher lows resulting in an ascending parallel channel. Although ETH cuts through the lower trend line of the pattern, the technical data suggests an upward trend outlook.
The 100-four-hour moving average (MA) rises above the 200-four-hour MA by the $ 1,710 mark. If successful, this represents a “golden cross” indicating an increase in the short-term upward momentum. Interestingly, this cluster agrees with 78.6%. Fibonacci Retracement level.
All of this, including the 50-four-hour MA at $ 1,811, provides a strong foothold for a quick rebound in Ethereum price.
A likely course of action for buyers would be to push Ethereum price towards a retest of the all-time high at $ 2,042. If bullish momentum persists, ETH could climb towards $ 2,465 or even $ 3,000, which coincides with the 127.2% and 161.8% Fibonacci retracement levels, respectively.
ETH / USDT 4-hour chart
IntoTheBlock’s In / Out-of-the-Money-Around-Price (IOMAP) model makes this outlook even more believable. This metric shows a perfect brew for an upswing, a combination of a stable demand barrier and little to no resistance.
Transaction data shows that around 1.1 million addresses contain nearly 14.71 million ETH at an average price of $ 1,787. Hence, any short-term bearish momentum is likely to be absorbed by the investors present here.
Ethereum IOMAP chart
In addition, the number of addresses holding between 100,000 and 1,000,000 ETH is up 7%, showing that whales are not worried about recent price movements but are piling the front runner Altcoin.
Distribution diagram for Ethereum holders
While everything seems bullish for Ethereum price, investors should be cautious with a dip below the immediate support level of $ 1,729. The downturn would bring many investors “out of the money” and trigger a sell-off that could push ETH up to the top $ 1,500.