The price of Ether is set for another strong rally, according to the managing partner and head of research at Fundstrat Global Advisors.
Ether to Reach New Highs?
In a report from CNBC, Bitcoin bull Tom Lee sent a note to clients yesterday stating:
We believe Ethereum is about to stage a trend reversal and rally strongly.
The note comes at a time when the market has struggled to gain much traction since the beginning of 2018. To date, the highest Ether has risen is around $1,400 during the market rally in January. Since then, however, it has dropped in value by over 80 percent. At the time of publishing, it’s trading at $224, according to CoinMarketCap.
Such is the drop of Ether’s price that, back in August, it was reported that it had fallen below $300 for the first time in nine months.
Yet, despite the recent lag in price, Lee is confident that Ether will soon see a turnaround in value. In Lee’s opinion, the fact that Ether has underperformed other crypto assets the last four times by two standard deviations is a “sign of capitulation.”
This price confidence is also felt with another tech analyst.
Earlier this month, Ian McLeod, analyst for Thomas Crown Art, stated that Ether will “rebound considerably before the end of 2018.” Additionally, he argued that within five years, Ethereum will halve the market share of Bitcoin.
Catch-22?
Undeniably, 2017 was an impressive year for Ethereum. With the plethora of initial coin offerings (ICOs) being launched, appetite for the blockchain was ripe.
However, that appetite is beginning to wane. This is partly due to its bottleneck issues, which has also seen fees rise sharply. Back in January, it reached a high of $3.137. While it’s nothing compared to Bitcoin’s high fee of $55 at one point, it does show that Ethereum is not immune to scaling issues.
Yet, with the ICO teams accepting Ether, investors keen to get involved bought the crypto asset, which was then sold to the projects for their respective tokens. In turn, this helped to bump the price of Ether up. The altcoin then simply sat in the development teams’ wallets. Of course, when they needed money to pay for salaries, they subsequently sold their Ether, pushing its price back down.
It’s a catch-22 situation. But despite all this, Lee expects a rally soon.
Do you think its price will rise again? Let us know in the comments below.
Images courtesy of Shutterstock and CNBC.