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      • Secure Digital Markets Inc (SDM) is a leading global digital asset trading, marketing making, and treasury management firm with an MSB license that provides boutique financial services to small medium and large capital management groups, payments and forex corporations and other financial institutions, governments and individuals. SDM was founded in 2017, is headquartered in Toronto and New York City with partners and representatives in financial centers around the world.

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ethereum price analysis

Ethereum Price Analysis

  • Ethereum remains an attractive altcoin while undergoing fundamental changes to its network to fix congestion and scalability issues
  • Ethereum’s innovation in smart contracts enables Decentralized Finance (DeFi) to flourish, and the DeFi market is lucrative right now
  • The promise of Ethereum 2.0 makes investors bullish on Ether’s long-term potential; the short-term outlook is more conservative

 

Ethereum continues to be one of the holy grails of cryptocurrencies alongside Bitcoin. ETH is currently trading at ~$338 with a market cap of $38,121,328,861, making it #2 on Coin Market Cap. While it’s nowhere close to Bitcoin in terms of price or market cap, ETH dwarfs the number #3 spot – Tether – in all categories.

Today, we’ve got another Ethereum price analysis. We’ll investigate Ethereum’s recent movements, what might be causing it, and where it might go in the future.

Recent Price Movements

Ethereum was one of the many casualties of Black Thursday, or March 12, 2020, when the coronavirus pandemic forced countries across the world into lockdown. The WHO declared COVID-19 a pandemic a day before, and the crypto markets reacted similarly to traditional markets.

ETH took a hit, but its decline started on March 7, when it was trading at ~$245. By March 12, it had dropped to $106.12. Considering its price now, it might be fair to say that ETH has recovered from the fallout. It took until the end of April for ETH to break the $200 threshold again and has remained fairly consistent aside from a quick dip to ~$189 in early May.

ETH has been climbing incrementally. Near the end of June, ETH’s volatility dropped below Bitcoin for the first time. This development indicated that traders didn’t expect significant price movements. Investors were bearish in the short-term and bullish in the long-term.

Indeed, ETH started to make leaps near the end of July. July 21 saw ETH trading at ~$235. It was at ~$315 just seven days later. It tested the $400 resistance level multiple times, reaching $401.59 on August 5 before dropping again.

August was fairly volatile for ETH; speeding to almost $450 and then dropping to ~$385 within two weeks. The coin saw a crescendo at ~$480 to start September. Such price action likely brought out the bears, who pushed it down to ~$320 with the first week of the month.

On September 17, the Ethereum network recorded a new all-time high for daily transactions, reaching 1,406,000. The previous record was 1,350,000 transactions on January 4, 2018.

Ethereum’s Network Changes

Let’s not forget that Ethereum’s unique value proposition, smart contracts, propelled the crypto community into a new era and attracted traders to the Ethereum platform.

The downside to new users was more congestion on the network. The Ethereum team has been working on Ethereum 2.0 by updating the blockchain’s consensus protocol from a Proof-of-Stake model to Proof-of-Stake to solve their network issues and PoS’s shortfalls. Although, they missed their January 2020 release date for this protocol overhaul, dubbed Serenity.

The promise of Ethereum 2.0 has caused a wave of excitement and impatience amongst the crypto community, which manifests through ETH’s price fluctuations.

Such anticipation is likely causing a surge in user activity. Approximately 40 million addresses hold Ether, a 350% increase from the first quarter of 2018 when ETH was at an all-time high of $1400. Ethereum’s gas fees ballooned to $500K within an hour on September 1, when ETH’s price reached ~$480.

Another factor influencing ETH’s recent movements in Decentralized Finance (DeFi). DeFi broadly refers to any decentralized version of financial offerings. It is transparent, interoperable, and permissionless. DeFi has a philanthropic spin to it, promising to cater to the unbanked – the millions of people who are not served by any financial institution.

In other words, DeFi is another market opportunity. The DeFi market is booming right now, with almost $9 billion of total value locked (TVL). Luckily for Ethereum, most DeFi applications are built on their network because smart contracts are an integral building block. Check out a report on the state of DeFi.

However, this also means that Ethereum supports DeFi projects related to itself and ERC-20 tokens on its blockchain. It’s a step in the right direction, but DeFi has a long road ahead towards true decentralization.

What the Future Holds

The simple fact is that if more people use the Ethereum network, for DeFi purposes or otherwise, they likely use Ether for one thing or another, like transaction fees, which helps bolster mass adoption.

Polychain Capital CEO Olaf Carlson-Wee forecasts the altcoin to reach ~$7000 sometime in 2021. Nigel Green, known for his work with Devere Group, believes ETH will see a surge near the end of 2020, reaching $2.5K. Similarly, the crypto prediction platform CoinKir believes Ether will approach the $1500 territory by the end of this year.

The bears in the mix include Coindesk, who rightly forecasted Ether’s short-term struggle. They note the need to break past its resistance levels to stabilize. Otherwise, the coin could slip under $100. CryptoGround, an analytics firm, started the year with a bearish outlook. They have since changed their stance, forecasting ETH to reach $1445.20 by 2025. Here are more price predictions.

These are exciting times for Ethereum. Even Binance CEO Changpeng Zhao is optimistic about Ethereum 2.0, noting that he underestimated Vitalik Buterin’s ability to deliver on Ethereum 1.0. Indeed, a protocol overhaul is a significant change that will likely take years to fully realize. It takes careful testing to solve their complex technical issues.

Of course, these changes to the underlying technology aim to strengthen the network and support the ever-growing crypto community. Therefore, ETH’s long-term bulls might be on to something.

 

 

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