Ethereum is the second-largest cryptocurrency in the world in terms of market capitalization levels, but this didn’t prevent it from dealing with rather severe losses over the past few years as crypto markets have been struggling to regain their footing and consolidate their positions. Many investors have been looking for the best strategies on how to buy ETH during these times, as lower prices have traditionally been associated with increased rates of buying. However, the fact that the marketplace has remained relatively low is not good news for most investors, many of whom would like the environment to be a little more dynamic so that they wouldn’t have to be concerned about the fluctuations.
So, what can market participants expect from the trading environment in the near future? After all, while the cryptocurrency environment is notorious for its volatility and fluctuations, estimations and predictions are the lifeblood of this environment, and investors are always interested in learning what the future brings in order to come up with more objective game plans and strategies. The best predictions are naturally the ones derived from objective analysis and technical metrics, as they are more based in reality rather than wishful thinking and what would be beneficial for the person making the predictions.
Price fractal
In price charts and financial markets, the concept of a price fractal refers to five-bar reversal patterns that can uncover turning points within market movements that seem to be entirely random. Right now, investors are looking at the 2023-2024 price fractal, which seems to indicate that the price will continue moving on the upswing. The figures show that the price has been consolidating between $1,500 and $2,000 before experiencing a break out to $3,500. The current price action has so far followed this pattern and mirrors the earlier consolidation phase.
As a result, many analysts and investors believe that a bullish breakout will occur sooner rather than later, especially if the numbers continue moving in roughly the same direction. The same momentum is necessary as well, and in fact, the Ether market experienced this not very long ago, between January 2023 and March 2024. But what about the prices? While it is still relatively early to be specific, most believe that a $10,000 level is achievable and that it could actually become reality by the end of 2025.
Fibonacci
Fibonacci retracement levels are well-known metrics among investors and have been used for a long time. These numbers are prices depicted horizontally on a chart, and their purpose is to indicate areas where support or resistance is more likely to take place. Every single price level is directly associated with a certain percentage amount that can measure precisely how much of a retracement there was in an earlier peak in the price action. This analysis also points in the direction of a $10K level for Ethereum.
Typically, when investors notice several tools are pointing in the same direction, they are more likely to be optimistic about their prospects. Exponential moving averages and the relative strength index are also showing on the Ethereum weekly chart, further emphasizing the potential of this bullish run. This trend also has historical precedence, so traders have a better idea of what they can expect. The 2017-2018 and 2020-2021 bull runs were similar to the current conditions, and sharp conditions ended up resulting in unbelievable growth. Right now, if Ethereum ends up following the same trajectory, a rally from the 2022 low of $1,080 places the Fibonacci extension at nearly $7,000 and the 2.618 extension at a whopping $10,623.
As of December 16th, most investors believe that gains are inevitable, as the marketplace is going through one of the most significant bull rallies in its history. The $4.5K milestone is the next step, with the $5,000 price point expected to follow soon after. Adding the neutral RSI, which is well-positioned at 46, to the mix means that there is plenty of room for upswings. The only thing missing is a momentum shift, but if Ethereum succeeds in reclaiming key levels, it could target the area at around $6,900 sooner rather than later.
Macroeconomics
The larger economic trends may appear to be completely unrelated to the crypto environment since digital coins operate independently from traditional, standard markets. However, that doesn’t mean that they don’t influence each other. Since Ethereum and Bitcoin are entirely decentralized, there are several factors that influence their price action, including volume, investor sentiment and engagement rates, and, of course, economic shifts and world news. This is why it is vital for investors to pay attention to the news in order to have a better idea of the strategies they should implement next in order to boost their revenue and increase their returns.
The M2 money supply is particularly important in this regard, especially given that it has recently experienced steady growth. The M2 is a supply measure that includes cash, checkable deposits, and any other holdings that can be converted into fiat. In the past, cryptos moved alongside the growth of M2 supply when it was close to a significant rally. Between 2011 and 2020, serious gains were recorded in the BTC environment during times of M2 expansion. The liquidity boost and inflationary concerns were largely regarded as the most potent catalysts, and the 2024 situation is similar to those that occurred during those years.
The fact that central banks are easing policies in response to persistent uncertainties can also help cryptocurrencies prosper. But what does this have to do with Ethereum? ETH and Bitcoin have an enduring positive correlation with each other, so growth in the price of one can also lift the other up.
The cryptocurrency environment is fundamentally changeable and prone to fluctuations and price changes. While digital holdings are definitely maturing and becoming more robust, many features have remained the same. Investors must still be aware of the possible shifts and changes that can occur and plan accordingly to avoid massive losses.
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