The bullish momentum is now back in Ethereum after long periods of consolidation. Although the slow price movement may seem boring to most market participants it is believed that ETH has reached a crucial stage in order to establish a sustainable bottom.
At the time of writing, Ethereum (ETH) trades at $1,550 with sideways movement over today’s trading session and a 20% profit in the last seven days. In the same period, the meme currency recorded a 30% profit. In the crypto top 10, ETH’s price performance is only surpassed by Dogecoin (DOGE).
Ethereum Near To A Multi-Year Low?
Mike McGlone is Senior Commodity Strategist with Bloomberg Intelligence believes Ethereum’s migration to a Proof-of-Stake (PoS) consensus will be crucial in its long-term appreciation. Global markets have been affected by high energy costs and inflation in the current macroeconomic climate.
As a result, the U.S. Federal Reserve (Fed), has tightened its monetary policies. In response, Ethereum and risk assets have returned to pre-pandemic levels.
Still, the market cap of the second cryptocurrency has fallen below its all-time 2017 high, which was around $1,400 to $1.500. As McGlone emphasized, ETH’s price has prevented further downside at these levels despite the Fed implementing its most aggressive strategy in forty years.
In that sense, the expert believes Ethereum is cementing its position “at the epicenter of the digitalization of finance.” McGlone wrote:
(…) the No. 2 crypto may be forming a foundation around $1,000 (…). This graphic depicts the possibility that No.2 crypto may be creating a base at the 2018 peak. It was around this time when global liquidity peaked out at around 14%. Ethereum appears at a discount within an enduring bull market (…).
The Ultimate Asset of Deflation
If macroeconomic conditions improve and the Fed pivots its monetary approach, Ethereum might finally reclaim previously lost territory and steal Bitcoin’s thunder. According to the expert, ETH could see a quicker decline than BTC in supply.
A rising demand for digital assets will be a positive sign for the second cryptocurrency by market capital. McGlone wrote:
(…) new Ethereum supply shrinking more quickly after a protocol change that began moving coins from circulation in August 2021 and this year’s merge. Conmetrics’ 52-week rate for change has been below 2% in relation to the total number of Ethereum coins. It is now on track to be lower than Bitcoin.