Ether (ETH), the world’s second-largest cryptocurrency, might be on the cusp of a historic price surge, according to a crypto market analyst. This comes despite the recent launch of spot Ether exchange-traded funds (ETFs) failing to deliver a significant price jump.
Past Performance No Indicator: Ether’s New Era?
Swyftx lead market analyst Pav Hundal argues that past performance is no longer a reliable predictor for Ether’s future price movements. He believes Ether has “all the elements to rally like it has never seen before.”
Hundal highlights several factors that could fuel this potential rally:
- Staked Ether’s Scarcity: A significant amount of Ether is currently staked, effectively removing it from circulation and contributing to a tightening supply.
- ETF Launch and Positive Options Market: The recent launch of spot Ether ETFs and the positive sentiment in the options market, indicated by a bullish put-call ratio of 0.27, are seen as bullish indicators.
All-Time High in Sight, But Short-Term Volatility Expected
While Hundal refrains from providing a specific price prediction, he suggests that Ether’s “nearer-term goal” is to reclaim its November 2021 all-time high of $4,890. However, he anticipates a potentially “choppy” price movement over the next 30 days.
The launch of spot Ether ETFs on July 23rd saw a decent start with $106.6 million in net inflows. However, Ether’s price remained relatively flat, dropping slightly in the following 24 hours. This muted response suggests that investors might have viewed the launch as a buying opportunity. Data shows a surge in buying activity by permanent holder addresses just before the ETF launch.
The Merge’s Impact: A New Paradigm
Hundal emphasizes that the Ethereum Merge, which transitioned the network to a proof-of-stake model, has fundamentally altered Ether’s supply and demand dynamics. He suggests that focusing on Ether’s pre-Merge price history might not be an accurate reflection of its future potential. With “deflationary mechanics” now in play, less Ether is being created during periods of high network activity, potentially leading to a price increase.
While Hundal’s analysis paints a bullish picture for Ether’s future, short-term volatility remains a possibility. Investors should closely monitor market developments and conduct their own research before making any investment decisions.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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