Like Bitcoin, Ethereum has surpassed almost every other multi-billion dollar asset in recent weeks. Since the low of $ 88 in March, the cryptocurrency has rebounded to $ 226 – a gain of over 150%.
With this move, investors have become extremely optimistic about the cryptocurrency, with data from Bitfinex indicating that there are over 1,619,876 long contracts on Ethereum. That is more than three times the number of long positions at the beginning of 2020 and more than nine times the number at the peak of the bull market in 2018.
Despite the optimism of investors, top analysts expect bearish price developments for Ethereum in the near future.
On-chain analysis signals impending Ethereum weakness
According to a prominent cryptocurrency analyst, the amount of ETH traded on exchanges is “basically at an all time high”, reaching around 18 million coins.
This trend could be pessimistic for Ethereum’s value, the analyst said, presumably referring to seeing an increased propensity for investors to sell the cryptocurrency.
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In addition to the declining on-chain trend, analysts are observing that the Ethereum charts provide an argument for the downward trend.
According to a prominent crypto trader, Ethereum lost an important support level yesterday, which has held four times in the past three weeks. This increases the chances of a “major correction”.
Others are even more skeptical of ETH and comment that an even lower decline than the March low of $ 88 is possible.
The same trader who predicted Ripple’s XRP would drop to $ 0.13 months in advance recently stated that Ethereum is in a textbook “correction pattern” that could take the coin towards $ 50:
Fundamental data could outweigh bear trend
Even though Ethereum’s outlook may be subdued, positive fundamentals could support the cryptocurrency.
Recently, the social media platform Reddit confirmed that it would host its latest feature, cryptocurrencies called “Community Points”, on Ethereum’s Rinkeby test network – and then finally on its main blockchain.
The news suggests that this new token system will connect millions of people to Ethereum.
Adam Cochran, partner at the Ethereum venture fund MetaCartel Ventures and angel investor in the crypto space:
“Today, Reddit introduced around 20 million new users to the cryptocurrency in a matter of seconds. That’s the number of users who visit Reddits / r / Cryptocurrency and / r / FortniteBR in a given month. “
In addition, the project has continued to work on the ETH 2.0 upgrade, which analysts expect will dramatically increase the usability of the blockchain and related tokens.
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