In 2022, ethereum was in a bearish trend. It is down 40% so far, far more than the average cryptocurrency. ETH has a long history as one of the best performing cryptocurrencies.
Since its introduction in 2016, it has largely outperformed Bitcoin, leading to a narrowing of the market capitalization gap between the two coins. This year, however, is very different from the long-term trend. A major incentive to buy Ether has been taken off the market due to the waning of the NFT craze. ETH is now mainly used by traders and the demand for the cryptocurrency is much lower than at the end of last year.
Ethereum Price Fluctuations
The market has seen no clear direction in the past 24 hours as a consolidation between $2,500 support and $2,600 resistance continues. As a result, we can expect a continued push in both directions after ETH/USD breaks on both sides.
As a result, the Ethereum (ETH) blockchain continues to undergo significant changes. Santiment, an on-chain data source, revealed that the price of Ethereum (ETH) has fallen to its eight-month low, which is good news for ETH investors. According to Saniment:
Ethereum is currently bouncing rapidly around the USD 2,560 level. In addition to the extremely tight #SP500 correlation it has now (even more than Bitcoin)), it now also sees low cost for 8 months. $ETH last had a fee of less than $4.10 in mid-July.
Source: Saniment
The market has risen slightly in the past 24 hours. While they both consolidated, Bitcoin gained 0.38 and Ethereum 0.34. Price activity in the rest of the market was similar.
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Investors see advantage
On Monday, March 14, Bill Barhydt, CEO of crypto exchange Arba, told CNBC that Ethereum has the potential to hit $30,000-$40,000.
Bill is getting more and more excited about the various use cases and advancements in the Ethereum ecosystem. He said†
“Ethereum’s network effect is based on the idea that it could become the computers of the world. It is used for stablecoins, NFTs (non-fungible tokens), defi (decentralized finance)… and now for gaming.”
The Ethereum 2.0 update is expected to be operational by mid-2022. He believes there can be a sell-the-news effect after the initial rush to bet. However, he is optimistic that if the total gas fee is lowered, ETH investors will benefit. Bill stated,
“If gas rates and transaction costs come down, which is the promise of the proof-of-stake, watch out, because now all the barriers to those network effects have been removed. I think you’re talking about potentially $30,000-$40,000 Ethereum”.
ETH/USD is trading near USD 2,500. Source: Trading Display
Whatever the reason for the price of Ethereum staying in the $2500 range, there are no technical reasons to show any strength. ETH is below the 2022 Volume Point Of Control, continues below the bearish pennant and is now below the 61.8 percent Fibonacci retracement from its all-time high to the low of the strong bar on the weekly chart at $2,570, next to the Ideal Bearish Ichimoku Breakout confirmation.
The downside risks of the Ethereum price are most likely limited to the $1800 value level in June 2021 and July 2022.
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Featured image from Pixabay, chart from TradingView.com