Source: PaxForex Premium Analytics Portal, Fundamental Insight
During the first half of 2023, Ethereum stood out as one of the top-performing cryptocurrencies in the market. Year-to-date, Ethereum has experienced a 55% increase and was recently trading at $1,865.
However, Ethereum has recently faced challenges in surpassing the $2,000 price level, similar to Bitcoin's struggle to break through the $30,000 mark. This uncertainty reflects the mixed sentiments among crypto investors regarding the future of financial markets, potentially leading to some turbulence ahead. Consequently, the question arises: Is it wise to purchase Ethereum while it is still trading below $2,500? Here's what you should consider.
A significant advantage in Ethereum's favor is its dominant position across various aspects of the blockchain and cryptocurrency landscape. It leads the market in areas such as non-fungible tokens (NFTs), decentralized finance (DeFi), the metaverse, and Web3. Ethereum's position stems partly from being the first to introduce groundbreaking innovations like smart contracts. Despite the emergence of numerous competitors, Ethereum has maintained its momentum and leadership.
One compelling example of Ethereum's prowess is its impact on the NFT market. Ethereum played a pivotal role in the NFT boom, with groundbreaking collections like the Bored Ape Yacht Club and CryptoPunks, which remain among the most valuable NFT collections globally. The top 25 NFT collections all reside on the Ethereum blockchain, solidifying its position as the leading platform for NFTs. While Bitcoin has seen some recent success with the introduction of Ordinals, Ethereum continues to dominate in terms of NFT sales volume. As a long-term investor, this is precisely what one would seek: a top-tier cryptocurrency with a clear competitive advantage and a significant market share lead.
Another crucial factor favoring Ethereum is its track record of consistent technological upgrades. With each upgrade, Ethereum stays one step ahead of its competitors. Last year, Ethereum captivated investors with The Merge, a highly anticipated transition from a proof-of-work blockchain to a proof-of-stake blockchain. This remarkable achievement was akin to changing the engine of an airplane mid-flight, showcasing Ethereum's technical prowess.
Ethereum exhibits no signs of slowing down in terms of advancing its underlying blockchain infrastructure. In April, Ethereum successfully implemented the Shapella upgrade, enhancing its appeal for crypto staking. The next significant upgrade, tentatively named Dencun (a blend of "Cancun" and "Deneb"), is scheduled for the fourth quarter of 2023. This upgrade aims to improve Ethereum's storage capacity, scalability, and efficiency, with the ultimate goal of achieving 100,000 transactions per second on the Ethereum blockchain—far surpassing what its primary competitors can offer.
Towards the end of 2022, Ethereum co-founder Vitalik Buterin introduced a comprehensive set of updates and upgrades aimed at transforming Ethereum into "Ethereum 2.0." While the technical aspects of these upgrades may seem intricate, their purpose is to enhance Ethereum's appeal for both users and developers. This well-defined roadmap for future development instills confidence that Ethereum is committed to a long-term strategy, rather than reacting impulsively to short-term market movements.
Important considerations should be noted, however. Investing in Ethereum does not come without challenges. Ethereum faces stiff competition from other cryptocurrencies striving to become the "Ethereum killer." This results in intense rivalry in sectors such as NFTs, DeFi, the metaverse, and Web3. It is reasonable to anticipate a gradual decline in Ethereum's market share within these domains over time.
Additionally, while Ethereum's technological upgrades are impressive, they are also complex, time-consuming, and occasionally frustrating. The implementation of The Merge, for instance, experienced significant delays, raising doubts among some investors about its realization.
Moreover, the cryptocurrency market remains volatile and speculative, with regulatory uncertainties prevailing. Any potential regulatory crackdown by entities like the Securities and Exchange Commission (SEC) could immediately impede Ethereum's growth ambitions.
That said, I maintain a positive outlook on Ethereum's future prospects. Ethereum possesses a best-in-class blockchain, a distinct competitive advantage, and diversification across various blockchain sectors. Furthermore, Ethereum has a roadmap outlining upcoming technological upgrades that will enhance its capabilities over time. Consequently, I believe it is advisable to consider purchasing Ethereum while it is trading below $2,500. Even at this price level, Ethereum remains nearly 50% below its all-time high, suggesting significant potential for future growth.
As long as the price is above 1800.00, follow the recommendations below:
- Time frame: D1
- Recommendation: long position
- Entry point: 2005.00
- Take Profit 1: 2100.00
- Take Profit 2: 2300.00
Alternative scenario:
If the 1800.00 level is broken-down, follow the recommendations below:
- Time frame: D1
- Recommendation: short position
- Entry point: 1800.00
- Take Profit 1: 1700.00
- Take Profit 2: 1600.00
