Ethereum Is Expected to Suffer Further Losses, Analysts Say

By dan saada January 27, 2020 Off
etthereum suffer

Analysts claim that although the long-term fundamentals of Ethereum (ETH) are intact, its short-term price action will bring pain.

The same way with Bitcoin (BTC), ETH has been consolidating after posted a high back in June 2019. Based on the crypto’s $363.30 high in 2019, Ethereum has lost more than 62% of price value. The aforementioned losses tend to increase, considering the crypto’s trading value of $1,424.30 back in 2018. From the crypto’s all-time high, it shed more than 90% of its value.

A number of retail traders expressed their sentiments that the extreme losses can be an indication that the bottom is about to start. But some analysts said that investors might experience more pain as the persistent bear market is forming.

Currently, the second largest crypto asset in terms of market cap is down over 10% from the high in 2020 over the US Dollar. Besides, the price of ETH is poised to test the support level of $148 before a new rally.

Since Ethereum has seen with some bearish signs, some people speculate that it might decline under a $158 support level. Based on the data released by Kraken, there’s a major contracting triangle that started to form close to the $158 support level in the 4-hour ETC/USD chart. So, the pair could either extend its decline to $148 level or rally towards $165.

Can ETH Gain Double Digits Before the Recovery?

Some analysts expect that ETH might experience a period of depression.

Back in 2017, ETH was trading under $8.00 and then fell to $7.00 level before the mega bull rally. So, the crypto asset is speculated to enter a more painful leg down before a recovery.

However, once the Ethereum bottoms out, a lot of long-term investors can enjoy substantial gains. Analysts predict that after a decline under $100, ETH would rise to $1,000 and even above in 2021.

Slumping Prices vs. Growing Fundamentals

No matter how the prices of Ethereum slump, its fundamentals continue to grow. One of the reasons behind this continued progress is Decentralized Finance (DeFi). DeFi users can take advantage of more advanced financial services as well as censorship resistance. So far, more than 3 million Ethereum are locked in these tools.

Furthermore, there’s a growing of unique ETH addresses due to the parabolic rise of Ethereum holding in Decentralized Finance. In fact, it surged to over 84 million from more than 5 million in 2019. In short, users of ETH continue to grow.

Most of Ethereum maximalists have already expressed their excitement in the introduction of phase 0 of Ethereum 2.0. It is expected that the initial step in the transition of proof of work-proof of the stake will take place in the first quarter of 2020. In the ETH 2.0’s phase 0, users can stake their Ethereum holdings.

From a fundamental perspective, ETH is likely poised to more developments. However, people in the crypto space require more patience before the price of ETH catches up.

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