Since its all-time high in November 2021, Ethereum has lost slightly over 80% of its value, but some market indicators suggest that it could soon return to its previous high of $3,000.
Let’s look at the possibilities for why it might materialize and not just be another hype phase for the crypto market.
Ethereum Merge
Ethereum, one of the top altcoins of all time in terms of performance, is one of the many crypto initiatives with the goal of going green. It has been a long time coming, but the Ethereum Merge is an improvement to the Ethereum network. It appears that September 15, 2022, has been chosen as the date.
When using blockchain, the upgrade should result in a 99% reduction in electricity use.
Blockchain users have come under fire from detractors of cryptocurrencies who believe their use is bad for the environment. Therefore, implementing a technique known as proof of stake will be necessary for Ethereum’s efforts to minimize its carbon impact.
Since many crypto experts anticipate that the Merge will significantly revolutionize blockchain, now might be a good moment to invest in Ethereum.
The long-in-development initiative, known as “ether 2.0,” is expected to change the basis of the blockchain. The Merge should relieve the strain placed on electrical grids and reduce the millions of terawatt hours that cryptocurrency consumes. Mining is one of the main causes of high electrical consumption on the blockchain.
Market Cycle
After consolidating for more than two years, Ethereum went on a massive rally towards the end of 2020. Investors who bought Ethereum in the lows of March 2020 would have profited almost 5,000% if they stayed in the market when ETH topped out at $4,800 in November 2021. Those are massive gains in just over a year and a half.
Since the massive rally, Ethereum has lost just over 80% of its value. Most investors expect Ethereum to drop even further because the sentiment is bearish. But the crypto market has revealed two important trends: a bounce almost always follows a massive crash and reversals occur after 80%+ price plummets.
Ethereum has dropped more than 80%, but it hasn’t had a significant bounce since finding strong support. The market is finally starting to reveal an Ethereum bounce, as the market has produced six consecutive weeks of green candles.
Even if Ethereum is set to make new lows, the market has shown that cryptos usually reach 0.702 Fibonacci retracement levels before continuing their trends. For Ethereum, that means reaching at least $3,600.
NFTs
Non-fungible tokens have exploded in the last few years, and the market looks set to grow to $147 billion by 2026. Most NFTs are part of the Ethereum blockchain, and they’re compatible with anything built using Ethereum.
As the NFT market expands so will the Ethereum network and the demand for its coin.
