Ethereum Market Analysis

We understand how difficult the situation in the cryptocurrency market is today. Many are scattered with predictions of the future value of ETH, without even taking into account some of the factors necessary for this.

Using the capabilities of the analytical site Coinmarketrate.com we`ll try to understand the most likely target prices on any time horizon and assess whether it is still worth “believing” in ETH or it is more interesting to look for another asset.

June 2022 will be remembered for a long time as one of the most difficult months in the history of cryptocurrencies. The collapse did not spare even Ethereum, which under other circumstances turned out to be more than a safe haven for all those who were not tempted by the emerging altcoins. After seeing Ethereum, albeit briefly, below $1,000, many panicked, and now the coin is trying to restore more suitable price levels.

It seems difficult for the market to determine the bottom for both Ethereum and the more hyped Bitcoin. The uncertainty is caused not only by the disruptions in the chain that have affected the cryptocurrency world, but also by the so-called classical finance, when inflation and tightening interest rates continue to cause stress and anxiety.

 

Ethereum is also just a few steps away from what will be a life-changing change in the way consensus is managed. However, with some delays, which opens up short-term uncertainty regarding ETH. It is difficult to say whether this will have an impact on the medium term. For many, at the same time, this price level is more than interesting to consider in the medium and long term. In this detailed article, we will try to figure out the intricacies in order to dispel the clouds that have gathered over the entire cryptocurrency market.

Possible scenarios for the development of events for ETH

The possible scenarios for Ethereum, both in the short and medium and long term, are different, starting with the assumption that we are facing a real giant in a sector in which several funds have already invested, including institutional ones, and which is more in line with the dynamics of the financial market. There are also several features that make Ethereum unique in the market, which we will try to analyze in this section.

• Megde will have weight, but not as much as many people think

The “merger” remains the most important event in the history of Ethereum. From Proof of Work, he will move to almost pure Proof of Stake, with all the consequences that follow from this, including in terms of centralization. On the other hand, there are financial concerns about the stability of the protocol, since it would already have accumulated in the bets the amount of ETH capable of doing the trick with the protocol.

However, many mistakenly believe that there will be an immediate unblocking of the ETH that have already been included in the new protocol. This will not happen, and the huge reserves of the project will be available mainly in installments, which will avoid immediate sale.

• Central project

No matter how many detractors there are and no matter how many reasonable doubts there are about the sustainability of Ethereum in terms of technology and achieving its goals, the project is and, in all likelihood, will remain the standard for the coming months and years.

Many say that the standards set by Ethereum may outlive the network itself. Assuming that this is the case, then we are still quite far from this event.

In the world of DeFi, NFT and even in the world of the metaverse, Ethereum still occupies an absolutely dominant position. If the Merger does happen, Ethereum will also regain at least some of its dominant position in terms of sentiment. It would also change the opinion of some regarding the sustainability of the project that exists right now, during one of the most difficult hours in the cryptocurrency market as a whole.

• Clear direction

The fact that some detractors object to the fact that Ethereum is constantly reviewing its goals after several failures is unfortunately true. Clearer information about how the network is moving, which, we repeat, is responsible for a huge part of the DeFi sector, would certainly help or almost help.

It’s not going to happen now, but at some point you need to sit down and try to get clarity. You can’t go from Sound Money to The World Computer with impunity, and then to another marketing trick. Contrary to the opinion of detractors and non-believers, this does not contribute to the credibility of the project, especially if it has a high capitalization.

• Correlation with Bitcoin is high 

Yes, there is a correlation with Bitcoin and, in all likelihood, it will remain high, and there is no chance, except in a very narrow time frame, to see any kind of denouement. This is due to the fact that it is BTC that still controls the entire market and dictates conditions to it, although the ratio between them is not always fixed.

What do the main technical indicators say about Ethereum ETH

Technical analysis tools are useful for those who want to get a short-term view of the Ethereum price trend, time horizons that go beyond what we just saw with fundamental analysis. Here we will look at the best of them, those that are used by trading professionals to get an approximate picture of what is happening in the market.

• Moving Averages

These are some of the most commonly used tools in classical investments, as well as in the world of cryptocurrencies such as Ethereum. Are they accurate readings? Not necessarily, but they are the first starting point for all those who want to invest in the short term and conduct their own analysis.

The situation is not the best, and it is influenced by what has happened in the world of cryptocurrencies in recent weeks, with a vertical collapse that also affected Ethereum. However, the situation can change quickly, especially on a daily basis.

• Indicators on Ethereum

They help to offer us additional analysis to what we have seen on the example of the moving averages above. They do not always coincide, and the presence of divergences between these two categories of instruments should always encourage us to study the price action more carefully before moving in any direction.:

The indications coming from this group of instruments, if you will, are even less clear. This is a sign that we are facing serious complications regarding short-term reading. In which direction will Ethereum move? Much is likely to depend on exogenous events.

In search of the bottom

The cryptocurrency sector has suffered from a very peculiar situation in international markets, even those that are practically unrelated to cryptocurrencies.

We are almost desperately looking for a bottom, a price level from which to start all over again. For Ethereum recently, it was the $1,000 level. But are we really at the end of a possible descent? It’s hard to say without more clarity about what the Fed will do to combat inflation.

But Ethereum will stay here, and it won’t go anywhere. And this is something that we will have to take into account, in addition to tribalism and insults that are often heard on social networks. Ethereum may not like it, and there are rational reasons for such a position. However, the markets, as they have repeatedly demonstrated, are not interested in what is happening in the crypto bubble, and look at other factors to decide which projects are worthy of investment and which are not.

And we believe that this will be the case in the medium and long term (and therefore we should act with this factor in mind), despite the fact that the Binance chain, like many other very solid projects with the highest functionality, is already in the game. The network effect of Ethereum is still very strong, and even if it loses relative market share, it won’t necessarily be a problem because it will be a smaller piece of a much bigger pie.

There is a lot of uncertainty in the short term

Which affects not only Ethereum, but the entire sector as a whole, including in the big cap segment, that is, cryptocurrencies with high market capitalization. In the short term, even greater fluctuations are possible than those to which the cryptocurrency market has accustomed us. All risks exist, as well as opportunities, which in any case should be evaluated very carefully.

In the short term: opportunities and risks

Undoubtedly, in the short term for Ethereum, and especially in such a market situation, there are always many risks and many opportunities. Those who move in the short term will have to do this by actively using stop losses and take profits, trying to maximize sideways movement.

In the long term: Ethereum will Continue to play an Important Role

Many claim the opposite, but we believe that Ethereum will still be a force to be reckoned with. Perhaps new, riskier projects will provide higher returns, but at the cost of greater uncertainty. The biggest obstacle for Ethereum remains the Merger and its implications in terms of decentralization. If this succeeds, even at the cost of a significant reduction in the horizontality of the chain, we can confidently expect a rosy future in terms of the price of Ethereum.