ETHEREUM : FUNDAMENTAL ANALYSIS + NEXT TARGET LONG
Updated
Ethereum was the first blockchain network to feature smart contracts - programs that are self-executing when two unrelated parties meet the necessary conditions for a transaction. This is an incredibly important innovation that has the potential to wipe out competitors in some industries by eliminating the need for intermediaries. This is why Ethereum is called the world's decentralized computer.
So it's not surprising that the price per ether (ETH), Ethereum's native token, has risen 530% in the past five years. But it has fallen 50% this year, which means now is a good time to buy.
After peaking at nearly $3 trillion in value last November, the cryptocurrency market has generally been on a downward trend. This is because the Federal Reserve, trying to fight inflation, which central bankers mistakenly thought was temporary, adopted a strategy of raising interest rates to lower prices throughout the economy. As a result, investors became risk averse, leading to a bear market in cryptocurrencies in particular.
Although the consumer price index, a key indicator of inflation, slowed in July, it still rose 8.5% YoY. It signifies higher interest rates shortly and further pressure on cryptocurrencies.
Ethereum has not been immune to market turmoil. It hit a record high price of nearly $4,900 per token in mid-November of last year, but today a single ETH is worth about 65% less, mimicking the decline of the overall cryptocurrency market.
This period, commonly referred to as crypto winter, is characterized by declining asset prices and waning investor interest. But it could be one of the best times for buyers. Ethereum is one of the most promising blockchains, with more developers working on it than any other cryptocurrency, which is a positive indicator of its long-term viability.
It has been on an upward trend lately, as the price of ETH soared 38% in the last month compared to 12% for bitcoin. The optimism surrounding Ethereum lately can probably be attributed to "The Merge". Scheduled for Sept. 15, this is when the Ethereum network will move to a consensus proof-of-stake (PoS) mechanism that allows token holders to lock, or bet, their assets to validate transactions on the blockchain.
PoS is designed to be 99% more energy efficient than the current proof-of-work system, a process that requires huge amounts of electricity and processing power to validate new blocks. It is what Bitcoin runs on, and it has attracted a lot of negative attention because of its lack of speed and allegedly harmful effects on the environment.
PoS is only the first of five updates; the next four are called The Surge, Verge, Purge, and Splurge. They are designed to help Ethereum scale better, which is necessary given that today the network can only handle 13 transactions per second. If Ethereum wants to maintain its dominance in the world of decentralized applications and gain greater global adoption, these updates are simply necessary.
The Ethereum community has been waiting for this event for a long time, and now that it is almost here, a bullish sentiment may take over.
Owning cryptocurrencies, a volatile, nascent, and untested asset class, and technology, is extremely risky. That's why it's best to invest only the money you're willing to lose. You could say that no more than 5% of a well-diversified portfolio should be allocated to digital assets. This arrangement allows investors to benefit from potentially huge growth while limiting possible losses.
Despite being the second most valuable cryptocurrency, Ethereum is no different. It's all about owning the right amount that will allow investors to sleep well at night. Ethereum's closest catalyst, The Merge, has a chance to accelerate its adoption, and that's an important reason to buy.
So it's not surprising that the price per ether (ETH), Ethereum's native token, has risen 530% in the past five years. But it has fallen 50% this year, which means now is a good time to buy.
After peaking at nearly $3 trillion in value last November, the cryptocurrency market has generally been on a downward trend. This is because the Federal Reserve, trying to fight inflation, which central bankers mistakenly thought was temporary, adopted a strategy of raising interest rates to lower prices throughout the economy. As a result, investors became risk averse, leading to a bear market in cryptocurrencies in particular.
Although the consumer price index, a key indicator of inflation, slowed in July, it still rose 8.5% YoY. It signifies higher interest rates shortly and further pressure on cryptocurrencies.
Ethereum has not been immune to market turmoil. It hit a record high price of nearly $4,900 per token in mid-November of last year, but today a single ETH is worth about 65% less, mimicking the decline of the overall cryptocurrency market.
This period, commonly referred to as crypto winter, is characterized by declining asset prices and waning investor interest. But it could be one of the best times for buyers. Ethereum is one of the most promising blockchains, with more developers working on it than any other cryptocurrency, which is a positive indicator of its long-term viability.
It has been on an upward trend lately, as the price of ETH soared 38% in the last month compared to 12% for bitcoin. The optimism surrounding Ethereum lately can probably be attributed to "The Merge". Scheduled for Sept. 15, this is when the Ethereum network will move to a consensus proof-of-stake (PoS) mechanism that allows token holders to lock, or bet, their assets to validate transactions on the blockchain.
PoS is designed to be 99% more energy efficient than the current proof-of-work system, a process that requires huge amounts of electricity and processing power to validate new blocks. It is what Bitcoin runs on, and it has attracted a lot of negative attention because of its lack of speed and allegedly harmful effects on the environment.
PoS is only the first of five updates; the next four are called The Surge, Verge, Purge, and Splurge. They are designed to help Ethereum scale better, which is necessary given that today the network can only handle 13 transactions per second. If Ethereum wants to maintain its dominance in the world of decentralized applications and gain greater global adoption, these updates are simply necessary.
The Ethereum community has been waiting for this event for a long time, and now that it is almost here, a bullish sentiment may take over.
Owning cryptocurrencies, a volatile, nascent, and untested asset class, and technology, is extremely risky. That's why it's best to invest only the money you're willing to lose. You could say that no more than 5% of a well-diversified portfolio should be allocated to digital assets. This arrangement allows investors to benefit from potentially huge growth while limiting possible losses.
Despite being the second most valuable cryptocurrency, Ethereum is no different. It's all about owning the right amount that will allow investors to sleep well at night. Ethereum's closest catalyst, The Merge, has a chance to accelerate its adoption, and that's an important reason to buy.
Note
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