Will Ethereum Crash and 4 other Key questions and Answers: Readers invested in Ethereum are a little concerned about what will happen to Ethereum. So we have compiled a quick Compendium of Key Questions and Answers
The Current State of Ethereum Holders
According to Intotheblock
- 36% of Holders are in the money
- 48% are not profitable
- 61% are holding the Crypto for more than a year (The Price one year ago was $2368)
Ethereum Price today is the same as it was in January 2021.
Will Ethereum crash?
The fact is Ethereum has already crashed. Just this year, Ethereum has lost 2/3rds of its value. Ethereum has lost 75% of its value from the peaks of 2022. Of course, the real question is, will it crash further?
Given the Micro and Macro environment, the probability of Ethereum heading lower is much higher than it going lower. Some have asked the question if Ethereum could go as low as $375. However, there is no evidence or Buzz that Ethereum will lose another 50-75% in the next few months. Four reasons for the same
- Ethereum’s 7-day average fee in June 2022 is about $9 M. This is much lower than November last but still quite substantial. It is also 7 times higher than the second-ranked player.
- The second point is Ethereum’s revenues will not fall substantially from here because as the Cryptomarket collapses, Ethereum’s gas prices will also fall. Other players like Solana, DOT, or even Matic will struggle to Compete on Price.
- It is true that Ethereum fell much more than say Cardano but in our view, that is temporary as the price was making adjustments for the delay in the Merge as well as a sudden drop in revenues on account of Luna. In fact, Ethereum is leading Cardano over the last 24 hours.
- The Technicals suggest Ethereum has bottomed out at the moment.
Why is Ethereum Falling? Why is Ethereum dropping?
Ethereum is falling because
- Alts have collapsed. A large proportion of Ethereum’s demand for its coins comes from Alts. As the demand for its coins falls, so does the price
- Liquidity in the market has fallen on account of Inflation and the Fed increasing rates
- A Bitcoin versus Ethereum comparison will tell us the story
- On a 1 year basis, BTC is down 45%, Ethereum is down 52%
- Since November 2021, BTC is down 66%, and Ethereum is down 74% (when Inflation got hot)
- Since the crash of Luna, BTC is down 11%, Ethereum is down 29%
So while the macro factors impact both BTC and ETH equally, Alts performance impacts Ethereum by a wider margin.
Will Ethereum recover?
Ethereum will certainly recover in the next 12 months. As the macro situation improves (perhaps somewhere between August and October, see our analysis on crude prices and inflation here), Ethereum will start moving higher. The pace of growth however is unpredictable at the moment
However, Ethereum will witness some volatility over the next 2-3 months. For example, Ethereum is back above $1200 after falling below $1100. It could go a little lower too. Three factors come into play
- Will we be able to overcome inflation without a recession and serious job loss? – Eth recovery will be faster and furious
- Will we be able to turn the tide on Inflation in the next few months? – Eth recovery will be faster
- Will there be any more bad news from cryptos like $LUNA? – This will push the recovery to next year
How high will Ethereum price go?
We have compiled data from multiple forecasters and one of the estimates is $3100 by 2025 which is more than double the current price.
Finder’s expert poll claims Ethereum will touch $24k by 2030.
Many of these forecasts are likely to be unreliable but with the likely rise of Metaverse, DeFi, and Smart Contracts in mainstream businesses, the demand for Ethereum is likely to rise over the next 5 years.
Will Ethereum reach the price of Bitcoin?
At the moment we see no forecasts that suggest Ethereum will reach the price of Bitcoin anytime soon. It would depend completely on how the ecosystems evolve over the next few years and at the moment there is limited visibility on that.
Note: Crowdwisdom360 collates Predictions and data from all over the net. Please consult a registered investment advisor to guide you on your financial decisions.