Ethereum Stages Recovery After Drastic Freefall
During the week ended May 6, Ethereum rallied 34.5%. Trading at $2,976 with a 1.8% profit in the daily chart, the cryptocurrency was poised to break the $3,000 mark. At these levels, there are major walls of resistance and expert trader by the pseudonym Edward Morra said the following week would be crucial to determine ETH price trajectory. The price chart for the past 3 months saw ETH break the $1,000 and $2,000 mark. ETH also showed a large order for selling at all exchanges at the $3,000 mark. The order spreads from $9 million to $30 million. There is a bullish sentiment for ETH, as the cryptocurrency saw an inflow for its investment product at $34 million.
Two weeks back the price of ethereum rose steadily, reaching a high of $4150 with a market capitalisation of $477 billion. A massive $15 million in short positions have been liquidated across exchanges as ETH soared past the $4000 mark. The parabolic ETH price rally was seen due to renewed interest and buying from US institutional buyers. Experts opined it would be a bad move to sell ETH given the current bull rally. With this all-time peak, ETH market dominance rose to 19.1% as opposed to sub 44% for BTC since the market crash. ETH expanded its lead further in 2021. Though Bitcoin has gained 100% YTD, ETH has gained 4.5 times as much, with a 450% YTD gain.
On May 23, Ethereum price fell below $2000 for the first time since April 7. The cryptocurrency’s price was almost half of the high of $4165 on May 12. As a result the market cap of ETH almost halved to $230 million from the high of almost a trillion dollars. In the period May 11-12, ETH fell 18% as opposed to 45% in the past week. The latest dip of Ethereum followed a week of subdued news for the crypto market. This was sparked by the May 12 statement of Elon Musk that Tesla would no longer accept Bitcoin citing environmental reasons. Ethereum uses the same energy-intensive proof-of-work mechanism as Bitcoin.
However, ETH is switching to an energy-efficient consensus algorithm later this year called proof-of-stake which the Ethereum Foundation, the not for profit foundation which maintains the network, said would make it 99.5% more energy efficient. Meanwhile China said crypto mining is highly speculative and detrimental to a stable financial system. China housed the largest crypto mining in the world due to availability of cheap electricity. Combine this with the related news which caused a market freefall and left ethereum limping. However, on May 19, Ethereum saw a recovery but many investors wondered whether it was a dead cat bounce.
Crypto price predictions could be very tricky, yet ETH shows signs of recovery and experts believe it could touch values of $2800 in the short term, that is by June. A Goldman Sachs prediction also states that ethereum could outpace bitcoin in the long run. Many crypto enthusiasts believe that if this bull run continues, Ethereum price prediction by the end of the year could see $10,000 levels. Despite a nearish sell-off following the crash, ETH is seeing a rebound and is approaching critical resistance levels, crossing it would signal an upward trajectory.
Ethereum price crashed 46% on May 19, as it fell from $3144 to $1890. Although the bears were predominant, the bulls however had their say as they pushed ETH price to $2446, bringing it in the key demand band zone of $2106 to $ 2396. The daily candlestick close indicated that buyers were pocketing the smart contract token at a discount. Although positive, a close above the simple moving average (SMA) at $2769 could signal a robust recovery. The altcoin pioneer could bulldoze itself to the $3430 resistance level to rally 23%.
