The price of Ethereum (ETH) has been under heavy pressure for weeks. In one month, the cryptocurrency lost more than a third of its value. Yet analyst Tom Lee, also a very big name in the Ethereum world, sees reason for optimism in this phase.
Ethereum price is recovering in V-shape according to Tom Lee
Lee, principal researcher at Fundstrat, expects Ethereum to stage a strong recovery after the recent crash. He made his comments during a recent conference in Hong Kong.
According to Lee, the current decline is not exceptional and history may repeat itself again. Since 2018, ETH has fallen more than 50 percent eight times.
In all cases, a so-called V-shaped recovery followed, according to Lee. By this he means a sharp upturn that is proceeding quickly, just like its decline. “Ethereum always recovers,” Lee emphasized during a conference in Hong Kong. “Once again, we think ETH is close to the bottom.”
At the time of writing, Ethereum’s price fluctuates around $1,970. That is about 60 percent lower than the all-time high reached in August. Last week, the digital currency even briefly dipped towards $1,700.
Tom Lee’s Bitmine Continues to Buy Ethereum
Tom Lee is also chairman of Bitmine, the publicly traded company with the largest Ethereum reserve in the world. At the end of January, the company expanded its position again with a purchase of 40,302 ETH worth $117 million. In total, Bitmine now owns 4,325,738 Ethereum worth $8.69 billion.
A large part of this is actively staked. That turns out to be extremely lucrative. At the end of last month, the company reported that half of its stock has now been secured. This puts Bitmine on track to earn around $164 million in staking rewards annually, although ETH’s price was still slightly higher at the time.
Analyst: Ethereum price forms bullish pattern
There are now also interesting signals on a technical aspect. For example, analyst Trader Tardigrade indicates that Ethereum is preparing for a possible breakout from a multi-year bull pennant.
A bull pennant is a classic price pattern that usually indicates a continuation of an upward trend. It is characterized by higher bottoms and horizontal resistance that converge in an increasingly narrowing price channel.
Tardigrade emphasizes that this is a long-term investment. Still, he believes the upcoming rally could “redefine” the market.
There are some comments to be made. ETH naturally remains sensitive to macroeconomic factors. Market sentiment is still fragile and geopolitical tensions or unexpected economic figures can still cause significant fluctuations in the digital currency.
Source: https://newsbit.nl/ethereum-herstelt-altijd-tom-lee-zet-in-op-v-vormig-herstel/
