The world of cryptocurrency is definitely full of volatility, as prices seem to fluctuate drastically each day, causing both alarm and celebration in the same day for investors, but Ethereum (ETH) seems to be suffering worse than other cryptocurrencies. Here’s a peek at how the cryptocurrency has performed over the last few months and why it may be worth it to wait before investing in this cryptocurrency before the end of 2018.
Why is ETH dropping so Much?
August and September were not great months for the cryptocurrency market in general, but ETH suffered the most volatility compared to Bitcoin (BTC) and Ripple (XRP). One possible reason is that the team behind Ethereum has been slow to release any updates and partnership announcements concerning the cryptocurrency. The price downtrend appears to be driven by project owners selling their ICO holdings and converting ETH into their chosen fiat currency. ICOs themselves have been down trending, which has flattened the market for ETH.
Technical Analysis for September
A technical analysis of the last two weeks of ETH’s performance on the market seems to indicate that the lower support level for ETH has reached the $165 level, which is the lowest it’s been since October 2017. The next available horizontal resistance for the cryptocurrency sits at the $290 level, but the anemic volume of ETH makes it unlikely it will achieve that break-out point before the end of September. The ETH market is very bearish at the moment and trending downwards.
BTC Price Rise
One immutable truth about cryptocurrency is that if Bitcoin is up, it’s likely that the rest of the altcoins are experiencing a high tide, too. ETH’s support level of $165 will cause a bounce in price up to $230 or more should BTC’s price level dramatically increase over the next few weeks. BTC’s price has been hovering between $6,200 and $6,700 for a few weeks now after reaching its $7,000 break-out point at the end of August. Some analysts expect the cryptocurrency to trend as high as $10,000 again before the end of 2018. If that happens, BTC will likely take the price of ETH with it despite what the current technical analysis for ETH shows.
Is ETH Undervalued Right Now?
ETH has shed nearly 5% of its value week over week from the beginning of August, so some analysts do believe that the cryptocurrency is undervalued right now. However, the currency doesn’t appear to be breaking out of the current bearish trend and prices could reach that $165 resistance level before they’re pulled back up by a rising BTC price. The long-term resistance price for ETH is in the $400 range for holders, so if you believe the coin will reach those levels again, then ETH could be considered undervalued. ETH’s market trajectory depends on whether or not the team behind the cryptocurrency can share more information about partnerships. The downtrend in ICOs and their potential to be used as pump and dump schemes has shaken investors on long-term ETH performance.
