Ether (Ethereum) has been making sparks lately. Since the latest analysis published by Capital in Momentum (its investment letter) and 21Millions (its dedicated cryptocurrency newsletter), the prices of the main bitcoin challenger and the crypto queen have both jumped 27%, a phenomenal increase in less than two weeks. Our prediction of an explosion in price volatility has come true spectacularly…
And the coming months could remain hectic, especially since the underlying downtrend on ether is not yet in question (at least at this stage) and major events are on the agenda for the first quarter. After The Merge, ether could experience some volatility due to the next major update (Shanghai) which will result in the release of 16 million ether in March, notes Vincent Boy, market analyst at IG France. However, he believes that, once the doubts have been overcome, an outperformance of ether compared to bitcoin can be considered, which is also the preferred scenario by Capital, in particular based on technical analysis.
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Beyond the surge in ether and bitcoin prices since late 2022, which is prompting more and more cryptocurrency investors to hope for an end to the medium-term downtrend and a recovery in the long-term, Vincent Boy judges that ” the optimism is too fast” and the euphoria “still too great” for the bear market to have already come to an end.
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Especially since the “big hands” (investors with more than 1,000 bitcoins – nicknamed “whales – – continue to be skeptical of the scenario of a lasting recovery in cryptocurrency prices and “keep selling bitcoins” to the “weak hands” (individual investors more modest), observes IG. The “whales” expect a priori a new sequence of discounts, or even a market capitulation (sudden drop in prices, in a context of high transaction volumes) before anticipating a gradual and lasting recovery of the bull market.
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Furthermore, the shock related to the scandals of 2022 (Luna, Celsius, FTX, etc.) continues to have consequences. And the situation regarding Genesis and Gemini and by repercussion that of DCG is “monitored” closely, observes IG, who adds that Binance, although stronger than FTX, is not immune from a liquidity problem…
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Find our updated and comprehensive analysis on ether on Momentum and 21Millions from Friday 20 January. Momentum helps readers identify entry (buy) and exit (sell) points on stocks (and major cryptocurrencies). Discover the many analyzes (economic, financial and technical), our forecasts on price trends (our medium or short-term expectations), the main news to remember… Every morning in your email inbox. And right now, with the promo code CAPITAL30J, take advantage of a free trial month. To register, just click on the link below.
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Declaration of interests by the author