The correction of the leading altcoin continues, but there are several reasons for the rise in 2022.
Analyst Benjamin Cowen has done a historical analysis of ETH. In his opinion, the current situation is similar to those observed on the market in 2016 and 2017. Then ETH after consolidation “massively broke up to the upside”. A combination of these two phases likely awaits Ethereum today. The analyst notes:
– I don’t know exactly but I would expect Ethereum to put in all-time highs in 2022 and potentially continue moving on into 2023, but I think it is highly speculative to count on that at the moment.
Ethereum was in a consolidation phase between $2K and $4K for most of 2021. This resembles the situation in 2016 when ETH ranged from $8 to $16. It is possible that a breakout to the upside would drive Ethereum to $10K, according to Cowan:
– I would expect $10,000 is a reasonable target.
Many experts are talking about a possible breakout by mid-2022, connecting this to the launch of ETH 2.0. But there are also those who believe in the Christmas Rally or the ETH New Year Rally. The reason is the data on bullish sentiment in the ETH options market. Paradigm’s OTC (over-the-counter) platform has registered 14,000 to 18,000 call option contracts with prices ranging from $4,200 to $4,400. These are deals expiring on December 31st, according to research firm Skew. However, the firm also emphasizes that put options prevail over call options.
The dynamics of ETH in the short term can be strongly pressured by the success of competitive projects. Popular analyst and trader Michael van de Poppe points to Terra (LUNA) and two other leading altcoins that, in his view, are direct competitors to Ethereum. The experts stated:
– LUNA is one the strongest assets at this point in the cryptocurrency markets. Not only LUNA but also AVAX [Avalanche] has been doing really great. MATIC [Polygon] has been doing great.
Terra (LUNA) has grown a lot in 2021 and entered the top ten cryptocurrencies. LUNA is used for payments in e-commerce, for launching DeFi projects and serves as the basis for several stablecoins. Van de Poppe rates the coin’s growth potential as high. From its current price of around $88, LUNA could go up to $125 or even $200.
Perhaps the expert is too optimistic. So far, no competitor to Ethereum has been able to replace it. This is unlikely to happen just now when the market is controlled by cautious institutional investors.