Ethereum Price Analysis: ETH stares monstrous gains following short-term retracement
Daily ETH Price Forecast
- The $585 and $565 support levels are currently holding the Ethereum price up.
- 17% of the new money flowing into Grayscale’s Ethereum trust in Q3 2020 came from new investors.
Despite uninspiring price movement over the weekend, Ethereum is staring down some truly monstrous gains. While the price may experience a short-term correction, the upside for the smart contract giants remains immense. First, let’s look at the retracement and then we will see the growth potential.
How much will ETH drop?
On November 28, ETH found strong support at the upward trending line and bounced up to reach the $620 resistance wall over the next three days. Following that, the price drops down to the $585 support wall. After a brief retest of the $620 resistance, the price dropped to the $565 support. While ETH has since recovered slightly to $595, technical analysis tells us that more downtrend is expected. Notably, the monthly chart has flashed the sell signal in the monthly chart with a green-nine candlestick in the TD sequential indicator.
Image: ETH/USD monthly chart
But how far can we expect the price to drop? To gauge this, let’s look at the daily price chart.
Image: ETH/USD daily chart
According to this chart, the $585 support seems pretty sturdy as it presently coincides with the upward trending line. A break below that takes the price down to the $565 supply wall. These two support levels seem sturdy enough to absorb this temporary selling pressure.
Ethereum’s comeback: The massive upside of ETH/USD
While BTC has nearly reached its all-time high levels, Ethereum is still a long way off. Many investors believe that this is a negative sign and another indicator of the second-largest cryptocurrency’s lethargy. However, the fact remains that ETH usually makes its movement a month after Bitcoin does. For example, BTC reached its all-time high in December 2017, while ETH reached its ATH in January 2018.
So, what does this mean?
We can expect the price to reach its all-time high level over the next four weeks.
Image: ETH/USD weekly chart
That’s a 128% increase in valuation in the next 30 days. Is that an overly optimistic outlook? Maybe. But the institutional investors have also been reflecting this bullish credence.
Institutional investors weigh in on ETH
During an interview with Bloomberg, Michael Sonnenshein, Managing Director of Grayscale Investments, commented that there is growing investor interest in cryptocurrencies, and in particular, Ethereum. Plus, a recent Grayscale report stated that 17% of the new money flowing into their Ethereum trust in Q3 2020 came in from new investors, which is a highly positive sign. Plus, Ethereum also has the “DeFi factor” working in its favour.
Ethereum dominates DeFi-verse
DeFi remains one of the biggest driving forces of ETH’s price. While platforms like Tron and Binance Coin have made forays into DeFi, the fact remains that Ethereum is easily the market leader. As Bloomberg strategist Mike McGlone puts it, Ether is maintaining “platform leadership status.”
Ethereum’s key price levels to watch
Investors will want to keep an eye out for the $585 and $565 support walls. We are completely expecting these levels to stay strong and help the price bounce up to near all-time high levels. Exciting times lie ahead for ETH.
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