Analyst who predicted bitcoin’s rebound says ether could hit $10,000

Analyst who predicted bitcoin's rebound says ether could hit $10,000

Bitcoin surged to a new all-time high reaching above $65,000 on Wednesday, a day after the ProShares Bitcoin Strategy ETF (BITO) saw more than $550 million dollars worth of transactions on the new futures-linked product on its debut trading day.

Now, an analyst, Sean Farrell, Fundstrat’s Head of Digital Asset Strategy, says that ethereum the second-largest cryptocurrency by market capitalization will also benefit from the present BITCO effect to move above its all-time high.

He told Yahoo Finance Live he expects ether (ETH-USD) to not only move past its prior all-time high of about $4,200 set back in May but potentially all the way up to $10,000.

“What we’ve seen in prior bull market cycles for bitcoin is that bitcoin generally leads the rally, capital rotates, investors take their gains and rotate into altcoins, with the most predominant heavily-traded altcoin being ethereum.”

“And quite frankly, we think that a lot of people are overlooking ethereum into the end of the year, just due to the fact that bitcoin has garnered the lion’s share of headlines.”

Farrell pointed out a recent update on ethereum network that is expected to cause a disinflationary effect as the clincher.

He said, “you don’t meet the average investor that is aware of recent software updates in the ethereum network.”

“Recently, they updated the network with what was called EIP 1559, in which transaction fees are actually burned, causing a disinflationary effect. And what we’ve seen with the recent NFT craze is that all of the non-fungible tokens that have been minted and traded on the ethereum network have actually led to a rapid increase in the amount of ethereum’s supply burn.”

Bitcoin dominance, a metric used to measure bitcoin's share of the total cryptocurrency space, has historically rallied ahead of ether's price breakouts, according to Fundstrat's latest analysis. Thereafter, ether's price, charted in BTC (right axis) has historically risen.
Bitcoin dominance, a metric used to measure bitcoin’s share of the total cryptocurrency space, has historically rallied ahead of ether’s price breakouts, according to Fundstrat’s latest analysis. Thereafter, ether’s price, charted in BTC (right axis) has historically risen. Source: Yahoo Finance

Recall that, Yahoo Finance had previously reported the Managing Director of Magnetic, Megan Kaspar, predicting a $10,000 price for ether.

She based her $10,000 price forecast for ethereum on the basis that when the next remaining network change goes into effect, potentially sometime around the first quarter of 2022, it would carry roughly the same impact as three bitcoin “halvings” –  which is when the bitcoin block reward paid to miners is cut in half roughly every four years as dictated by bitcoin’s code.

It also has historically kicked off the bull cycle for bitcoin’s price moves, just as it did most recently in the spring of 2020.

Kaspar had earlier predicted ethereum to reach $3400.

Both analysts. Farrell and Kaspar point to the planned deflationary changes to ethereum’s network as the foundation for their bullish price prediction for the coin.

According to Farraell’s latest research note, Ether breaking out above $4,000, should not face much resistance at $4410, but likely surpass this and rally to targets near $4951, with additional technical projections up to $5826.

Also on Wednesday, Ether gained 9% to top $4,100 after the ProShares bitcoin-futures ETF began trading on Tuesday.

Farrell and his team at Fundstrat also maintained their earlier $100,000 year-end bitcoin price target, and predicted a potential move to as high as $168,000 if the historic inflows to the new bitcoin ETF continue.

 

 

 

Source: Yahoo Finance

Author: Greg