Home Business News Underperforming Ethereum could burst to $7,500

Underperforming Ethereum could burst to $7,500

by LLB Finance Reporter
16th Nov 23 9:30 am

Ethereum (ETH), the renowned cryptocurrency, has experienced substantial growth throughout the year, propelling its market cap to an impressive $146 billion, marking a remarkable 50% increase since January 2023.

Despite this achievement, ETH is encountering challenges that warrant careful consideration among potential investors.

  • Ethereum lacks the performance that BTC or SOL has shown in 2023.
  • ETH and BTC correlation has dropped recently, while ETH staking has also seen low activity.
  • The bullish rally still counts on Ethereum’s ETF proposal, BTC’s massive rally, and the technical readings.

The recent surge in Ethereum’s price surpassed the $2,000 mark, showcasing positive momentum. However, the coin faced resistance and couldn’t sustain these gains, hovering near a key level. Compared to Bitcoin’s outstanding 112% growth in 2023, Ethereum lags with a 57% increase.

ETH’s underperformance has sparked inquiries about its market position and future outlook. Regulatory scrutiny of Ethereum’s staking activities by the U.S. Securities and Exchange Commission (SEC) and a decline in overall blockchain activity raise concerns. Additionally, The Merge, intended to lower transaction costs and enhance speed, has not yielded the anticipated results.

The correlation between Bitcoin and Ethereum is gradually decreasing and currently stands at 0.80. Bitcoin’s recent popularity, driven by the impending launch of the first-ever Bitcoin exchange-traded fund (ETF), contributes to this shift.

Meanwhile, altcoins like Solana emerge as formidable rivals in the Layer-1 blockchain space, with SOL experiencing a substantial 325% gain, surpassing Ethereum’s annual growth.

In light of these developments, financial markets analyst Saqib Iqbal at Trading.Biz offers insights into Ethereum’s forecast for 2024. Despite challenges, several factors favor Ethereum’s potential for further growth.

Notably, BlackRock, the world’s largest asset management company, has expressed interest in creating an ETF holding Ethereum, aligning with the bullish momentum of Bitcoin. The correlation decline between BTC and ETH may not overshadow the overall market momentum driven by Bitcoin’s rally.

Analyzing the weekly chart of ETHUSD compared with BTCUSD, both coins exhibit a similar trend, albeit with differing magnitudes. Currently 54% down from its all-time highs, Bitcoin is expected to reach $100k in 2024, especially after the next halving, representing a 2.5x increase from current prices.

Ethereum, showing technical strength above key weekly moving averages, can potentially hit the $3,000 key level. However, surpassing the previous all-time high near $5,000, equivalent to a 2.5x increase from the current price, could trigger a swift rally to $7,500, a 1.618 Fib extension of the current swing down.

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