It’s time to get interested in Ethereum again

Crypto Winter It May Be But Ethereum Looks Like A Buy

The Winklevoss twins are cutting Gemini’s staff, saying crypto winter is coming. With the price of Ethereum (Cryptocurrency:ETH) down more than 60% from its recent high, it certainly looks like that is the case. However, our view is that Ethereum is finally starting to look interesting again as it is trading at a very low level, above previous resistance, and all ahead of the next major upgrade. The next upgrade, called “The Merge”, will merge the original Ethereum blockchain with the newer Beacon Chain to bring ETH 2.0 to life. At that point, Ethereum will officially switch from proof-of-work to proof-of-stake and become what we consider to be a more viable platform for investment. Once Ethereum becomes POS, the miners will disappear in favor of stakeholders who fund the network and provide liquidity for transactions. – MarketBeat

Crypto winter is not a new phenomenon. The cryptocurrency market has undergone multiple deep pullbacks, but the one that started in 2017/2018 stands out. The difference then is that China started a lockdown that pushes cryptocurrency out of the country. That lockdown shaved billions in market cap as investors flooded the exits and that is not what is happening now. At that point, the market corrected over 90% and we don’t see that happening now. The market is now at a pretty solid support target and that’s still above the main support target near $1420. The $1420 target coincides with the previous all-time high and should provide a solid bounce if not a reversal , and it’s only 70% below recent highs. The latest Cryptospring yielded a return of 4700%.

The rebound in Ethereum is brewing

The rebound in Ethereum after the first crypto winter was driven by a growing interest in the technology. That interest manifested itself after the market languished for a few years and included renewed consumer interest, adoption by mainstream financial circles and the rise of decentralized finance. Decentralized finance or defi is the next layer in the cryptocurrency ui and includes services such as loans, insurance and other financial transactions that require support and/or liquidity. The move to ETH 2.0 is in itself a form of defiance, as stakeholders are remunerated for their efforts.

The amount of Ether wagered on The Beacon Chain has grown steadily since its launch in December 2020. Its total value is now over 12.75 million ETH or barely $23 billion. The total dollar value has of course fallen due to the drop in ETH value, but we see this problem correcting itself. If so, the dollar value of The Beacon Chain will skyrocket due to the increased leverage and create a positive feedback loop for the market.

The Ethereum Merger…Should Happen Soon

The merger of Etherem and Eth 2.0 should happen soon, but investors should not hold their breath. The upgrade has been planned for years and has been pushed back several times. The latest June 2 update says to expect sometime in the second half of the year and we are leaning towards the back of that estimate. When the time comes, there will be two main risks. The first is that it won’t come. Due to the complexity of the system, the upgrade could be delayed again and again. The second is that it won’t work. If it doesn’t work, the upgrade could wipe out billions in value, but we don’t think it will. It is more likely that the upgrade will be implemented and we will return to a single Ethereum network quite soon. After that, the next step is to implement the shard-chain feature that enables off-chain transactions within the Ethereum framework. When that happens, it goes to the races for the price of Ethereum, because everything Ethereum has to offer is at your fingertips.
It's time to get interested in Ethereum again

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