Ethereum Price Prediction

The chart of ETH indicates that before it can start rebounding again, it still has further drops in store. For instance, its 30-day moving average (red), which had flattened over the previous week or so, appears to be starting to revert back towards its 200-day average (blue), indicating further losses.

The relative strength index (purple) for ETH has also dropped below 50 and may be headed even lower. It won’t reach its bottom until it reaches a number between 30 and 20.

Yet as was already mentioned, the coin has done well to maintain its $1,550 support level, which it hasn’t crossed since the beginning of February. Even then, it immediately increased to $1,600 within a few days.

Hence, even though ETH is anticipated to decline even further over the coming days, there is optimism that it will rebound quickly enough. Having said that, the market must hope that Silvergate Bank’s (possibly impending) bankruptcy doesn’t induce the collapse of other enterprises engaged in the cryptocurrency industry, as this might prolong selloffs over the long run.

Although the majority of exchanges have now severed their ties with the ostensibly collapsing Silvergate Bank, ETH may struggle to maintain its support level if the latter’s failure results in a chain reaction of similar collapses. But, if only Silvergate is impacted, it appears that the market selloff over the weekend has already priced in its bankruptcy, so after it formally applies for bankruptcy protection, it might not do more harm.

And once the effects of Silvergate’s failure have subsided, ETH will continue to be in a better position than most other cryptocurrencies to recover. This is due to a number of factors, but the main one is that it is by far the most dominant layer-one network, and that thanks to recent upgrades, it will continue to hold this position for the foreseeable future.

Also, it keeps getting good news. Most recently, Coinbase said that it would be releasing Base, a layer-two sidechain for Ethereum.

The debut of Base is significant because Coinbase intends to utilise it to “onboard 1B+ consumers into the crypto economy.” This indicates that it intends to get a further 1 billion people into the Ethereum ecosystem.

Since all layer-two transactions are ultimately resolved using the Ethereum blockchain and its native token, this has the indirect effect of increasing demand for ETH. In light of these other updates (like EIP 1559) that have decreased Ethereum’s net issuance of new tokens, the demand for ETH in comparison to supply may rise significantly.

The announcement from last month that global payments leader Visa is testing USDC stablecoin payments on the Ethereum blockchain is another good development for Ethereum. Thus, in addition to Coinbase, one of the biggest payment companies in the world is also joining the Ethereum ecosystem.

The Shanghai update, which enables stakers to withdraw the ETH they have locked and received as rewards, is also about to be released by Ethereum. Although some analysts claim this may lead to a short-term selloff, it’s another significant development for Ethereum because it essentially reduces the risks associated with staking for users.

With all of this in mind, once the Silvergate-related drama is over, ETH is expected to rebound to $1,700. And by year’s end, it may very well have surpassed $2,000 and be well on the road to recovery.

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