Ethereum (ETH) has been under unprecedented sell pressure these past few weeks. This pressure has been a result of the growing number of ETH Shorts on exchanges like Bitfinex. Recently, Jeremy Rubin, founder of MIT Digital Currency Initiative said that the price of Ethereum (ETH) will go to zero. The reasoning behind this is that people don’t necessarily have to use ETH for smart contracts on the Ethereum blockchain. This is partially true and Ethereum (ETH) founder, Vitalik Buterin recently addressed this quite well. He highlighted different ways in which Ethereum (ETH) will remain in use, for instance by block proposers. However, in a market where people take such statements at face value, a strong reaction was expected.
Ethereum (ETH) price declined sharply as it fell below the 21 Week EMA according to the above weekly chart for ETH/USD. Rubin’s statement added fuel to the fire and helped accelerate the decline. Fortunately for Ethereum (ETH) investors, the price has now bottomed out. However, a lot of people are still doubtful whether Ethereum (ETH) can reach a price above $1,000 again. Last week, Tom Lee of Fundstrat came to Ethereum (ETH)’s defense. He stated that the price of Ethereum (ETH) will reach $1,900 in 2019. This seems very plausible when we consider that Ethereum (ETH) has already begun a new trend. RSI for the above ETH/USD chart has finally broken out of a falling wedge and has started a new trend. Wave trend analysis shows that Ethereum (ETH) might be on the verge of a major breakout.
Ethereum (ETH) has already broken its downtrend against Bitcoin (BTC). The above weekly chart for ETH/BTC shows that Ethereum (ETH) has already begun a new trend against Bitcoin (BTC). RSI for ETH/BTC has also bottomed out and is poised for a rally in early October. Wave trend analysis also confirms a trend reversal. As we have seen before, Ethereum (ETH) forms a rising wedge followed by a falling wedge. The price has now broken out of the falling wedge and will have to rise to enter a rising wedge. It is pertinent to note that the ETH/BTC pair still remains below the 21 Week EMA. However, the price is not likely to fall further. Volume for ETH/BTC has been the lowest it has been in more than two years.
There is still a possibility that Ethereum (ETH) may not rally as aggressively as it did in 2017. This is because Ethereum (ETH) has broken its market dominance uptrend. This is also why we have seen Ethereum Classic (ETC) rising against Ethereum (ETH). The same is true of many other altcoins. As we formally enter a new cycle, we will see that Ethereum (ETH) will have a hard time making gains at the same pace as it did before. Investors who seek higher gains often avoid coins that can be shorted on margin exchanges like Bitmex or Bitfinex. CBOE Ethereum (ETH) Futures are also around the corner which will make shorting this coin easier and safer. That being said, Ethereum (ETH) will continue to have a place in the market. It might lose its spot to another platform coin but it is extremely unlikely to go to zero.
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