On July 30th, 2015, Ethereum had its official launch. Since then, it has become the second most popular cryptocurrency in the world, as well as the second-largest, second only to Bitcoin in terms of market capitalization. However, the troubles of 2022, with the crypto winter and bearish market trends, didn’t bypass Ethereum. In fact, it was hardly hit, and investors felt the price reduction severely. All were worried about the security of their portfolios, and many decided it would be best to abandon cryptocurrencies altogether before they could lose even more capital.
But then, at the beginning of 2023, something began to change. Binance recorded that the Ethereum price began regaining its strength and climbing back up. Growth hasn’t been linear, and the market is still struggling to overcome the additional hurdles imposed on it by regulatory pressures. The road won’t be easy, but most investors are confident that things will soon change, and they will be able to enjoy the effects of the rejuvenated market sooner rather than later.
Price predictions
Given the somewhat volatile predilection of crypto price points, with the values always somewhat unpredictable and the future more or less uncertain, predictions are widespread in the cryptocurrency environment. It provides both holding investors and short-term traders with a sense of increased security since they can use the figures as guidelines to choose their next move.
However, using predictions has also been somewhat controversial, and many are against them. The projections that reveal pricing information a month or even a year away from the present are frequently regarded with suspicion. Many investors caution newcomers against trusting this alternative, as it might leave them with significant financial losses. After all, predictions have been wrong in the past.
Currently, Ethereum is at a crossroads, very close to the $1,900 that could allow it to gain momentum and secure a spot on an upward trading movement. Since it is still unknown when exactly this will happen, researchers have used an algorithm to determine what they can expect from the price evolution throughout August. Prediction tools use machine learning to assess the potential of an asset.
Since July 14th, the Ethereum price has been on a downward path, losing some of its value, albeit nowhere near as drastically as last year. It still faces resistance at $1,926, which acts as a barrier against any noteworthy upward surges. However, Ethereum is still positioned above the 200-day moving average, which indicates that over the long term, there’s a positive trend in the price movement.
Over the past month, ETH experienced only twelve green days or 40% of the entire time. That represents a bullish tendency. Therefore, considering these indicators, it isn’t far-fetched to predict an eventual recovery for Ethereum and to expect more consistent performance in the future. Price appreciation is more likely than not.
To stake or not to stake
Since the introduction of the Shanghai upgrade in April, Ethereum users gained the ability to withdraw their staked coins. Initially, this was seen as potentially harmful, as investors were worried about the effects on the larger market. Luckily, this didn’t come to pass, and the market didn’t deal with any troubles. The opposite thing happened. ETH users began staking more coins than ever before, with the levels currently at an all-time high.
The main reason for this change is that a significant profit can be derived from staking, which is a certainty. In particular, it is much more reliable than providing liquidity, making traders more confident about their chances of improving their holdings and creating better revenue. As such, some analysts have started discussing the possibility that Ethereum might be replaced by LSTs, the liquid staking tokens that are minted anytime a trader stakes via a specialised protocol.
Opinions are divided on how likely this is. While the cryptocurrency space is well-known for its ability for growth and innovation, it’s essential to keep Ethereum’s reputation in mind. As one of the most popular cryptocurrencies, it gained a reputation for reliability. Compared with the rest of the cryptocurrency market, it is a stable asset that is commonly known to experience significant price fluctuations.
Moreover, novelty in the crypto environment is nothing new. However, it usually fizzles out quite quickly despite initial promises and the hype mellows on its own. It might be the same in the case of the liquid staking tokens, but it’s still too early to tell precisely how the market will evolve from this point.
DeFi slowdown
Even though the Ethereum market started the year strongly, the past months have been more unpredictable. While there were no considerable losses, it was nevertheless tricky for the coins to gain support and experience a genuine breakthrough within the bull market. Currently, the ecosystem is experiencing a slowdown in decentralised finance, which could cause massive liquidation. If this scenario turns out to be accurate, it can cause the prices to drop by a sizable amount, destabilising the gains Ethereum collected so far.
If the collateral goes down, the debt-to-loan will become too steep, so there won’t be enough capital to back up the debt. Unless you can refinance it, then there will be liquidation. Since many users are unlikely to have enough stablecoins to pay down the loan, the situation can get particularly troublesome. Ethereum requires more liquidity flowing into it to break through the resistance level at $2,000.
According to recent estimates, it might actually be the case that ETH will go as low as $1,600 and retest that level before embarking on a series of liquidations. The bullish pattern remains in place, but it remains to be seen precisely how it will evolve.
The cryptocurrency market is still recovering after the troubles it encountered last year. 2023 wasn’t all smooth sailing either, but investors remain hopeful that things will soon take a turn for the better. But it’s still uncertain when this scenario will start showing its first signs. Until then, users must remain vigilant of any intervening changes in order to protect their holdings.
