Ethereum, Will It Ever Move Higher Again

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Ethereum, Will It Ever Move Higher Again

Ethereum (ETH) – Weekly Update And Long Term Price Prediction

Ethereum is an open source, blockchain-powered platform that allows developers to build and utilize decentralized applications (dApps), also known as smart contracts. It is supposed to be the most advanced blockchain on the market and it may be, in theory. In practice it is a flawed platform in need of updates that developers just can’t seem to deliver.

In 2020 the Ethereum blockchain split into Ethereum and Ethereum Classic, following a lack of consensus on how to handle the aftermath of The DAO attack. The new Ethereum was meant to protect against future cyber attacks but still contains vulnerabilities. It is currently trailing Bitcoin in terms of market cap value and is likely to stay in second spot for the foreseeable future.

Ether is the native currency, it has two applications that will overtime help drive its value. Ether can be traded just like any other cryptocurrency and it can be used to run applications inside the Ethereum network. What that means is if another business or enterprise wants to use the Ethereum network for dApps and smart contracts they need to buy Ether to make it work. The problem is other blockchains, blockchains with a focused application, are stealing market share. If Ethereum can’t deliver soon it will become obsolete before it’s even finished.

Ethereum (ETH) Price Analysis – The Big Picture

ETH reached its all-time high of $1,420 on January 13, 2020 and it’s been all downhill from there. The token is currently trading at $137 with a market cap valued at $14,448,995,590 which makes it the second-largest cryptocurrency by value.

ETH/USD is in a clear downtrend, with lower lows and lower highs printed throughout the entirety of 2020. When it reached the low at $83 the Relative Strength Index (RSI) moved below its 30 level for the first time showing oversold conditions on a weekly chart. This has sparked some buying interest which could take the pair into the resistance at $250 in the next 3 to 6 months. The caveat is we cannot disregard the obvious downtrend while there is no good news. Until we get a positive catalysts and a significant higher high is printed all moves up should be treated as retracements, not reversals.

Things look a bit better on the daily chart than on the weekly one. We can see some bullish pressure and an exhausted downtrend that may result in a reversal. The bulls and bears are currently contending for the $134 level and the 100 days Exponential Moving Average, a move above that would be bullish. If the bulls win we will likely see another attempt to break $165 resistance, otherwise ETH could head towards $100 in the medium term.

Side note; there is a double top at $165 which is a bearish chart pattern. It shows that this resistance level has some strength. A break of $165 would prove the bulls are committed to taking the pair higher with a target of $250 over the next few months.

Daily Chart Support: $134 (currently tested), $105, $83

Weekly Chart Support : $80 – $83 (zone) and all round numbers below it (70, 60, etc.)

Daily Chart Resistance : $134, 100 days EMA, $165, $250

Weekly Chart Resistance : $250, $375

Most likely scenario : new attempt to break $165; if successful, the next target will become $200 followed by $250

Alternate scenario : a triple top is formed at $165, followed by a drop into $100 area

Ethereum Price Predictions for 2020: From Zero to $100k – What Do the Experts Think?

2020 was a huge year for Ethereum in terms of development achievements and the growing popularity of its market-reigning decentralized applications, or dApps.

On the year, though, this traction didn’t translate to major changes in the price of ether (ETH), the commodity “gas” of the Ethereum blockchain. ETH rose only two percent, from $140.82 USD to $143.89, between January 1st, 2020, and January 1st, 2020.

No shortage of ether proponents guessed the price would have risen more in that span, and other skeptics thought the second-largest cryptocurrency by market capitalization would have bled out further. So why was 2020 a sideways year for ETH?

There were many contributing factors, to be sure, but one was that many crypto investors acutely sought refuge in bitcoin (BTC).

After the cryptoeconomy last peaked in December 2020 and then experienced deep and repeated selloffs throughout 2020, many investors rebalanced their portfolios in 2020 to larger positions in bitcoin, as BTC has traditionally weathered selloffs better than most altcoins.

  • Other factors contributing to ETH’s 2020 performance had to do with Ethereum’s “king of the hill” status as the world’s most successful — and best-positioned — smart contracts platform to date.
  • As the home of the ICO boom, many token projects continue to sell into their ether treasuries to cover operating costs, which naturally causes acute downward pressure on the ETH price.
  • Moreover, as more platforms have launched billing themselves as “next-gen” competitors to the likes of Bitcoin and Ethereum, some investors have widened, rather than consolidated, their crypto positions.

Ethereum Price in 2020

These points lead us to the grand question for ether investors over the next 12 months: will the ETH price similarly tread sideways in 2020, or will the year prove to bring about a non-trivial rise or fall for the crypto’s valuation?

  • Proponents cite the recent Cambrian explosion of decentralized autonomous organizations, or DAOs, and decentralized finance, or DeFi, on Ethereum — and the many ensuing “money lego” possibilities accordingly — as reason why ETH has plenty of upside, potentially in the near, mid, and long-term.
  • Others yet cite the coming deflationary trends coming to ether, namely via the “fee burning” Ethereum Improvement Proposal (EIP) 1559. Buying into Ethereum today, some of these supporters say, may not be entirely dissimilar to picking up a few shares of Apple back when the company was still practically run out of a garage.
  • On the flip side, bears say a deep global recession could be coming or the entire cryptoeconomy is a bubble that will eventually fade in failing to go mainstream. Critics argue other projects will decisively beat out Ethereum and its native crypto going forward.

Ultimately, then, it’s not clear when or if the ether price will reach the lofty heights of its previous all-time high, $1,400, again. But what is obvious is that Ethereum is one of the space’s few flagship, must-watch projects, and there are plenty of arguments to be made as to where ETH goes from here.

As such, let’s take a quick look around at some of the more outstanding Ethereum price predictions for end-of-year 2020 and beyond. We’re also going to try to get a sense of what Ethereum’s potential could be, should it fulfill its backers’ dreams of becoming the next big thing in public infrastructure since the advent of the Internet.

ETH Price Predictions

To keep things orderly, quotes and associated ETH price predictions will be listed in order from lowest to highest price-wise. Timelines have been included where possible, although many Ethereum pundits like to keep their projections vague. After all, it’s nearly impossible to tell what will happen next in crypto.

If you want to see what the experts think of Bitcoin’s Price, see their predictions here.

Tuur Demeester:

Tuur Demeester is a Bitcoin analyst and founding partner of Adamant Capital, a bitcoin-centric actively managed fund. Another part of Demeester’s renown comes from having established himself as one of Ethereum’s biggest and longest-standing skeptics, a reality that has led to him widely being panned as a partisan critic in the smart contract platform’s community.

Fittingly then, Demeester earns the honor — or the infamy — of having given the lowest tangible ETH price estimate that we could find for this list: roundabouts $49 dollars.

Of course, Demeester didn’t exactly argue”$49 ether is definitely incoming,” but it’s clear he thinks another major selloff could be in play for ETH, so let’s break down the context of his relevant remarks.

ETH/BTC broke down from the 0.02 support line for the second time this year. In absence of a quick recovery, imo technical target could be as low as 0.0075 (-60%). pic.twitter.com/1itwfFGbQh

In late December 2020, Demeester highlighted via tweet how the ETH/BTC price ratio had taken its second sharp tumble on the year. “In absence of a quick recovery, [in my opinion] technical target could be as low as 0.0075 (-60%),” he wrote.

To simplify that a bit, on the day of that tweet, December 17th, the ether price closed the day at $122.60. Generally speaking, Demeester estimated ETH could potentially fall another 60 percent from that valuation. 60 percent of 122.60 is 73.56, so $122.60 – 73.56 = $49.04.

But Demeester’s suggested “quick recovery” may already have taken place, it seems. The first week of 2020 ended with an acute wave of buy pressure around the top cryptocurrencies, as the bitcoin price reached over $8,000 and ether traded over $145 — more than $20 up from where ETH was three weeks’ prior when Demeester made his aforementioned remarks.

Tanya Abrosimova: $80 to +$365

Tanya Abrosimova is a trading analyst and cryptocurrency editor at FXStreet, a popular forex trade publication.

In a 2020 ETH price forecast published in December 2020, Abrosimova laid out her and her colleagues’ bearish and bullish price predictions. The following bolded characters are Abrosimova’s own emphasis:

“Our bear case scenario implies that a failure to reclaim $155.00-160.00 area bodes ill for Ethereum bulls and increases the possibility of a further sell-off towards $130.00 and the recent low of $129.71. This move will negate all the gains of 2020 and opens up the way to $100.00 within 2020. This will bring 2020 low of $80.00 back into focus and potentially trigger the self-sustained doomsday prophecy for ETH.

Considering the downward-looking RSI (Relative Strength Index both on weekly and daily charts) implies the further sell-off looks. However, the indicator stays close to oversold levels, which means the market will be looking for the chance to initiate an upward correction. In this case, we may see another assault at $155.00 sooner rather than later.

Meanwhile, we will need to see a sustainable move above $185.00-$200.00 area for the bull case scenario to start unfolding. Once it is broken, the upside trend may gain traction with the next focus on $232.70 (SMA200 weekly) and $253.50 (38.2% Fibo retracement for the above-said move). However, the trend reversal will be confirmed only after the coin reclaims 2020 high at $365.25. This area is reinforced by SMA100 weekly.”

Notably, Abrosimova’s estimated “assault” of buying pressure toward $155 was in play at the conclusion of the first week of the new year, as ETH reached over $145 on January 7th.

Ryan Sean Adams:

$1,000 with ETH as economic bandwith for DAI

This isn’t a straightforward price prediction per se, but rather a rough approximation. Still, it’s quite interesting nonetheless, and it comes from Bankless newsletter maestro Ryan Sean Adams, one of DeFi’s most popular analysts.

On January 3rd, Adams referenced via tweet a goal for 2020 offered by Mariano Conti, the head of smart contracts at MakerDAO, which supports the Maker dApp and Dai stablecoin ecosystem. Conti’s goal was for the total Dai supply to reach the 1 billion mark. For reference, at press time the outstanding supply of Dai was 82.3 million.

If @nanexcool is right & 1 billion DAI happens this yr it’ll require $2.5b worth of ETH as economic bandwidth

At current ETH prices that means DAI consumes 17% of all ETH

To maintain 2% of ETH supply consumption ETH price would need to exceed $1,000

That’s economic bandwidth

— Ryan Sean Adams – rsa.eth (@RyanSAdams) January 3, 2020

In his tweet, Adams argued that for that 1 billion milestone to be reached, it would require $2.5 billion of ether’s market cap as “economic bandwidth,” derived from ETH being a base store-of-value asset.

Adams went on to point out that $2.5 billion was roughly 17 percent of ETH’s $15 billion market cap at the time, to which he added:

“To maintain 2% of ETH supply consumption ETH price would need to exceed $1,000 … That’s economic bandwidth.”

So this isn’t a hard estimate from Adams, but it does illustrate his case that ETH’s potential future success is intimately tied with its role in being a “base SoV asset providing trustless economic bandwidth,” as he puts it.

ZeroHedge: $1,000 if ETH chews into legacy payments

ZeroHedge, the popular anti-establishment markets blog, turned heads last fall when its pseudonymous Tyler Durden published an op-ed titled “The Speculative Case For $1000 ETH.”

Therein, Durden argued investors were “undervaluing Ethereum” and overvaluing legacy payments providers like PayPal. The author noted the example of PayPal requiring a $30 fee to send $1,000, while the same transaction would roughly cost just 30 cents on Ethereum.

Betting that the payments arena will pivot from “percentage fees based on payment amount to flat fees based on [blockchain] network congestion,” Durden posited that if Ethereum could continue to thrive and go on to eat into legacy payments companies’ market cap, the ether price could reach near $1,000 each:

“The current payment industry’s profit margin is stablecoins’ opportunity, and all the stablecoins that matter are on Ethereum. Given this dynamic, investors are overvaluing equity in payment providers and undervaluing ETH. The combined market cap of all of the legacy payment providers, the old and the new, currently sits north of $1T. If Ethereum — arguably the fastest growing fiat payment platform in the world — takes just ten percent of that market share, it will be worth $100B, or approximately $1000 per coin.”

Notably, later in his piece Durden suggested ether could go even higher than that.

“If Ethereum as payment platform is not worth just a fraction of the total value of the payment industry, what about Ethereum as the new value protocol of the entire planet,” he asked in conclusion.

Olaf Carlson-Wee:

$1,380 (well, maybe)

Polychain Capital CEO and early Coinbase employee Olaf Carlson-Wee made perhaps the most famous Ethereum prediction to date back in 2020 when he estimated that the market cap of ETH would overtake the market cap of bitcoin in 2020.

That projection never panned out, but presumably Carlson-Wee is as excited as ever about Ethereum, insofar as the same things that roused him about the platform before have only become that much more impressive since.

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With that said, let’s assume Carlson-Wee thinks Ethereum becoming the crypto with the largest market cap is still in play going forward, and furthermore just say that hypothetically happened right now.

Bitcoin’s market cap is presently just over $150 billion, so divide that by Ethereum’s supply of 108 million coins and you get approximately $1,390 per ETH.

“In Ethereum, this programming language is much more expressive and its higher level … so what we’ve seen in Ethereum is a much richer, organic developer ecosystem develop very, very quickly, which has what driven Ethereum’s price growth, which has been much more aggressive than Bitcoin … so maybe by the end of 2020.” – Olaf Carlson-Wee

Antiprosynth: ETH in striking distance of BTC

Antiprosynth is a pseudonymous Ethereum news aggregator who has earned a reputation for being the smart contract platform’s foremost public defender.

As such, Antiprosynth has argued far and wide that the market cap of Ethereum is well positioned to surpass that of bitcoin’s, having previously said that odds of such are “well over 50%.” They’re also quick to cite that Ethereum once came within 90 percent of bitcoin’s market cap and that a similar nearing is far from out of the question again.

I doubt they’ll be outsized compared to Ethereum. In fact I think that the probability that Ethereum overtakes Bitcoin’s #1 market cap position is well above 50%.

Ryan Selkis: Bullish on Staking

Ryan Selkis, founder of the Messari crypto research hub, caused a stir with his “Crypto Theses for 2020” predictions.

Therein, Selkis offered a wide range of industry insights and estimates, and one of them was that he was bullish on ETH in 2020 over so-called “ETH killers” since Ethereum 2.0 staking was launching early in the year:

“Most of the other ETH killers haven’t launched yet either, and their communities are tiny. It’s hard to imagine a glut of expensive VC-backed protocol tokens hitting a sideways market at the same time Ethereum soft launches staking (and those associated rewards) on its beacon chain, and that being bullish for the newcomers. I’m bullish on ETH, short the basket of everything else with that in mind, and that matters because you can’t kill ETH without that sweet sweet monetary premium.”

Brian Schuster: $100,000

The head of founder solutions at Ark Capital LLC presents a lofty picture of Ethereum reaching $100,000 per coin — as soon as it replaces gold as a store of value, that is.

The ultimate replacement of gold with crypto has been predicted by a number of other market observers, although Bitcoin is more commonly cited as the likely usurper.

Reaching even higher that that, Schuster has suggested that Ethereum’s platform capabilities may eventually lead to it to becoming a sort of digital motherland for all future currencies.

“What if you believe that Ethereum is less like one individual business and more like a store of value, like gold? This gives us a potential market capitalization of roughly $10 trillion, leading us to believe that the price of Ethereum might rise as high as $100,000 per coin. We might even go one step further and say that Ethereum is not like one asset, but an asset to replace all currency that exists.” – Brian Schuster

What Does the Future Hold for Ethereum?

Ethereum has great prospects and great challenges ahead in 2020 and beyond, that much is clear.

On the bright side, stablecoins, DAOs, and DeFi really started to come into their own on Ethereum in 2020, and there’s no sign that further related innovations will be slowing down any time soon — Ethereum is only four years old, so the platform’s ecosystem is just beginning its journey.

Another major point of intrigue and promise for Ethereum this year is the beginning of the Ethereum 2.0 rollout, which is set to take place by the end of Q1 2020.

  • The first phase of this upgrade will enact Ethereum’s shift to proof-of-stake (PoS) consensus, which will allow ether holders to stake ETH to secure the blockchain in exchange for block reward payments.
  • This dynamic is huge because it will bring annual yield to ETH stakers, a reality that will improve ETH’s economic bandwidth as Ryan Sean Adams might put it.

On the dark side, big questions remain too as we head into 2020. Will the Ethereum 2.0 transition go smoothly, and will DeFi experience its first major black swan incident?

These are perhaps the two biggest crypto-native questions, but public discussion around them is making Ethereum supporters ever vigilant.

There are bigger macro problems as well. What if the global economy slips into another financial crisis, or what if tensions continue to rise in geopolitical hotspots and war breaks out on the international stage? What happens to ETH then?

For now, whatever ends up happening, Ethereum is in numerous incontrovertible respects the king of the hill when it comes to smart contract platforms, and the moat between itself and its nearest competitors is vast and widening.

If things go as planned, Ethereum will continue to grow as “credibly neutral” public infrastructure that is trustless and open for use for anyone, anywhere.

References

  1. https://www.youtube.com/watch?v=shpwPNLqq4U
  2. https://twitter.com
  3. https://coinmarketcap.com/
  4. https://medium.com/token-news/devere-group-predicts-ethereum-could-be-2-500-by-the-end-of-2020-381e390fc68e
  5. https://www.barnesandnoble.com/w/investing-in-ethereum-jeff-reed/1124796051
  6. https://walletinvestor.com
  7. http://messari.io
  8. https://twitter.com/schusterdev?lang=en
  9. https://moneymorning.com/2020/07/06/these-are-2-ethereum-price-predictions-you-have-to-see/
  10. fxstreet.com

William M. Peaster is a professional writer and editor who specializes in the Ethereum, Dai, and Biticoin beats in the cryptoeconomy. He’s appeared in Blockonomi, Binance Academy, Bitsonline, and more. He enjoys tracking smart contracts, DAOs, dApps, and the Lightning Network. He’s learning Solidity, too! Contact him on Telegram at @wmpeaster

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All of these super optimistic predictions for the value of ethereum are lacking the true fundamental economics of a currency.

They are pitting the value of ETH against the value of a dollar, and whether they are basing this price rise on its increased usage and/or demand or on eth’s utility over that of fiat currency, (eg. smart contracts) the value they are putting on it still far exceeds the value ethereum provides. When they talk about ethereum replacing fiat currency, first of all, in most cases this does not need to be done, because fiat currency is not only accepted everywhere, but anything a cryptocurrency can do, fiat currency can potentially do as well, with regard to blockchain, or even mining platforms.

Fiat is as digital as any cryptocurrency. And can thus function as any cryptocurrency can, in terms of transactions happening in verified blocks. Its just a question of how one programs their blockchain, and what currency they decide to base it on. But where everything ends up in la la land is when people forget that any currency is first and foremost, a medium of exchange.

Why do you HODL a cryptocurrency? To look at your numbers on the screen? To get the highscore? Or is money REALLY actually representative of what goods and services you plan buy in the future? Maybe a mansion or a jet airplane for those with really high scores.

Well, the value of all our goods and services are always going to be a direct function of the cost of producing them. Currently , a person who earns 3000 dollars a month, is able to relate their labour contribution to what goods and services they can buy for their contribution of labour towards overall production.

This is the real value of money. People who HoDL a crypto currency are not holding a piece of the future, because ultimately the value of a currency will have to reflect the value of production of actual goods and services. That is if a crypto currency is worth 200 dollars now it will rise against the dollar IF dollars are being exchanged for the cryptos AND moreso than cryptos are being exchanged for dollars. But ULTIMATELY for either currency to serve the primary function of a currency, it will need to be traded for goods and services.

The value of cryptocurrency goes up when they are NOT being traded for goods and services. That’s what HODLing is. But in most cases, in current currency markets, when someone wants to actually buy goods and services, they need to trade for dollars, euros to do so.

Now cryptos are being exchanged for fiat so cryptos come down. That’s one side of the coin. Where the currency is accepted. The other side of the coin is that if for whatever reason, people were to increase their acceptance of ethereum as payment for goods and services, this does NOT increase the value of ethereum, as illusion commonly holds. The more common it becomes, as a currency, the more reflective it becomes of the TRUE value of goods and services, and the more costs mirror an actual relation of revenues in terms of production.

What makes the price of a cryptocurrency go up is all the HODLing, but as it becomes used, everything always comes back down to the value of goods and services. If your medium of exchange can by twice as much as it did last year, REAL economics will signal that some form of correction will need to take place to ensure every good and service moves toward an equilibrium value based on the supply and demand of those goods and services, and the currencies used to purchase them, will inevitably adjust to this, regardless of how well one currency works in relation to another.

Ethereum Whales on the move – Top 100 ETH wallets see increased accumulation

2020 has been a good year for Ethereum so far, with the token halving gained 92.39% since the start of the year. Most crypto analysts and commentators are all bullish about the world’s second-largest cryptocurrency, mainly because of the highly anticipated transition to Ethereum 2.0 from the existing Proof-of-Work consensus to Proof-of-Stake.

When Ethereum finally moves on to a fully PoS based system, the current inflation rate of 5% or more would be eradicated. According to the developers, the new system would further stabilize the blockchain and reduce the annual inflation rate to just 0.22 %.

Investor confidence on the rise

This could also be the reason that’s motivating whales to accumulate Ethereum as recent reports reveal that the top 100 Ethereum wallets are starting to stack up ETH. The event was noted by blockchain data analysis firm Santiment. The firm tweeted that the accumulation of ETH within the top wallets are signs of whale movement.

Ethereum’s steady drop from its yearly highs has done significant damage to its market structure, with bull’s inability to sustain its momentum, seemingly elucidating some underlying weakness. However, the cryptocurrency consolidated at $225, and since then, the token has risen roughly 6% currently trading just below $238.

As the top 100 wallets have totaled to account for 25% of total Ethereum in circulation, investor confidence on the world’s second-largest cryptocurrency might be on the rise. Santiment wrote:

“The top 100 holders of Ethereum are once again beginning to accumulate higher percentages of the total token supply, despite the ongoing consolidation that has been occurring for the past couple of weeks.”

According to Santiment, these patterns are indications of a potential price upside for the digital asset, even though it might take some time before the upward rally gains traction. The tweet further reads:

“Generally, when this kind of accumulation starts to mount, it’s a signal that those who have the most stake in ETH (and other respective tokens) are beginning to have a collective sentiment of the token being undervalued and believe it’s a high mid to long-term hold play.”

“Sometimes these price rises take a bit of time after this accumulation rises. Still, it is generally a good sign for Ethereum bulls.”

However, it must also be noted that the top 100 wallets consist of a variety of investors. Among the lot, 20 of the largest wallets are owned by various exchanges. As per data from TokenAnalyst, the wallets of Huobi, Binance, Bitfinex, Poloniex, Okex, Gemini, Kucoin, Bitstamp, Kraken, and Bittrex amount to roughly 18.5 million ETH, which is equivalent to 16.8% of Ethereum’s total supply.

ETH looks bullish

Overall, the market sentiment looks bullish for Ethereum. Other than the anticipation for ETH 2.0, the decentralized finance (DeFi) sector has also seen massive growth as it touched a record high of $1.219 billion on February 15, according to DefiPulse. DeFi giants like MakerDAO and most popular protocols are mostly based on Ethereum’s blockchain. The number of ethers locked in DeFi has also risen from 1.912 million on January 1, 2020, to 2.8 million this week.

Furthermore, the upcoming Bitcoin halving is also expected to fuel a 2020 bull run, and investors are preparing in anticipation of that. Previous bitcoin rallies have all seen ETH prices getting a boost.

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