Bitcoin may be down 50% from its all-time highs, but Ethereum has posted an even more harrowing performance. From the asset’s 2018 highs, set at the peak of the previous crypto-mania, ETH has fallen by over 85%, trading at $215 today after reaching $1,430.
Some have said that Ethereum’s inability to recover is a death blow for the cryptocurrency. Yet a leading analyst is convinced that the asset could triple in the coming months, citing a simple technical formation.
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Ethereum Could More Than Triple In Coming Months
According to Brave New Coin analyst Josh Olsewicz, Ethereum’s one-week chart is showing signs that the cryptocurrency wants to break seriously higher in the coming months. In reference to the chart, which shows that ETH is on the verge of breaking into the key Ichikomou Cloud resistance, he wrote:
“One-week Ethereum chart. End to end to $750 triggers within the next few months probably.”
Chart of Ethereum’s macro price action from Brave New Coin analyst Josh Olszewicz.
As to why a move to $750 — around 250% higher than the current market price — is probable, the trader noted that it would satisfy “Dow Theory” and would also mark a ~50% retracement to the 2018 highs.
Positive Fundamental Pieces Fall Into Place
It isn’t only Ethereum’s technical outlook that is strong, as analysts have observed positive trends transpire on the side of fundamentals too.
On May 13th, Coinbase shared data it garnered as the operator of one of the world’s leading crypto exchanges. The firm found that while Bitcoin is by and large the most popular cryptocurrency on the platform, it acts as a sort of “gateway drug” to altcoins.
Coinbase remarked that out of all the accounts registered in 2019 and 2020 thus far, “with at least 5 purchases on Coinbase.com,” a mere 24% are Bitcoin purists — meaning 76% of investors buy altcoins.
Chart from Coinbase indicating the propensity of the exchange’s users to buy altcoins after buying Bitcoin.
According to Messari’s Ryan Watkins, because so many cryptocurrency investors eventually diversify from Bitcoin, Ethereum and other altcoins stand to benefit:
“Bitcoin is by far the leading cryptoasset and perhaps the most important, but Coinbase customer data shows that new users generally begin to look for alternative assets and use cases. […] I imagine institutions will behave similarly over time.”
Adding to this, ErisX — a crypto futures exchange backed by players like TD Ameritrade, CBOE, Fidelity Investments, Nasdaq, and Virtu — recently launched the first US-centric ETH futures contract.
While not a launch on the famed CME derivatives exchange, analysts expect this Ethereum product to draw some institutional demand.
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Photo by Tunafish Mayonnaise on Unsplash
