After sky-rocketing to the 2nd largest cryptocurrency of all time by market cap in 2017, many Bitcoin investors were caught with their pants down at this unexpected and rapid growth shown by Ethereum.
Many users thought it had finally reached an all time high after hitting $1,000 in early 2018, yet even so it continued to climb until it eventually hit $1,400 and crashed shortly thereafter.
Yet technical and fundamental analysis reveals that Ethereum is far from done on its trajectory upward. While it has suffered a recent drop by nearly 75% over the past four months, the analysis indicates that it may finally be time for a roaring surge upwards to $2,000 and beyond.
Source: Author’s Coinigy AcctMany crypto bulls were distraught upon noticing the descending triangle pattern start to emerge over the past several months. These fears were quickly dissolved however, once Ethereum showed signs of a hard breakthrough of the descending trendline in mid-late May.
As many of you know, this is perhaps confirmation that Ethereum’s bear trend has come to an end. According to this indicator, Ethereum bulls have now taken over, and if past cryptocurrency bull markets are any indicator of the future, we’ve got a long ways to go before we hit a top.
What’s more, is that the support which Ethereum hit at around the $400 level has held strong for nearly 11 months. While it was previously a resistance starting in June of 2017, it quickly turned into a support during the start of the cryptocurrency bull market of 2017, and has since held up strong.
Source: Author’s Coinigy AcctMany skeptics have pointed out that this could simply be a dead cat bounce, so for further understanding of Ethereum’s trajectory, we must turn to several other indicators such as the MACD as well as Fibonacci predictions.
Source: Author’s Coinigy AcctUpon looking at the MACD, which measures momentum, it appears that different time frames point to different directions. After some thought however, one will realize that they both tell the same story.
The 1-day chart seems to indicate a slight drop in momentum, however upon looking at the 3-day chart, it seems like the momentum is just getting started. So what could this mean?
Source: Author’s Coinigy AcctMy guess is that in the short term (over the next week or so) we will see a retest of the $700 level support that we just broke, and keeping in line with the longer term increase in momentum, we will then see a very quick jump upwards to the $900 and eventually $1,000 levels and beyond.
Using a complex algorithm under the study of chaos theory, we can predict rough price points which Ethereum will hit. One such price point is often the “golden ratio,” or 1.618 number according to the Fibonacci sequence run.
According to the chart below, there are several probable price points which Ethereum will tend to gravitate towards. Based off of the current trajectory, resistances and supports, and other indicators, it seems highly probable that Ethereum will hit the 1.618, or $2,200 price point, within the next several months (or potentially even sooner knowing crypto’s explosive growth).
Source: Author’s Coinigy AcctWhile Ethereum could hit one of the lesser price points, such as $1,500 or even one of the higher price points such as $3,300 it seems like a good middle ground to shoot for roughly $2,200 which would mark a new high for the first Turing-complete cryptocurrency.
The Bottom Line
In conclusion, Ethereum is a phenomenal investment, and while we’ve certainly seen the cryptocurrency markets take a tumble over the past half year or so, their forecast seems to be sunny skies for the immediate future.
Ethereum is currently the second largest cryptocurrency by market cap, and it hasn’t even begun to delve into the current contracts economy, which it is expected to hold a monopoly on once it’s caught onto mainstream use.
Vitalik Buterin, the genius behind Ethereum, has also kept a very active role in the cryptocurrency’s development, expansion, and marketing aspects. While many may have their own opinion about this 24-year-old Russian millionaire, you can’t deny that he’s changing the world in unforeseen ways.
All of the indicators and technical analysis seems to point towards a very large spike happening within the next few months…and again, while the cryptocurrency markets are known for completely throwing everyone for a loop with rapid fluctuations, I’d bet a good chunk of change that Ethereum will be seeing new highs very, very soon.
Disclosure: I am/we are long ETH-USD.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.