The second largest cryptocurrency in the world, Ethereum, has entered an interesting buying zone, according to analysts. After a sharp drop of more than 13 percent in one week, several traders believe the currency may be on the verge of a recovery.
The price of Ethereum (ETH) briefly fell to $3,099 this week, but recovered to around $3,337 on Thursday. According to Dutch analyst Michael van de Poppe, founder of MN Trading Capital, the decline came “slightly deeper than expected”, but the current level is still “an excellent area to build positions”.
‘Possibly the biggest turnaround ever’
Other traders think the recent decline could actually be the start of a strong rebound. The pseudonymous analyst Ash Crypto called the price movement on
“Ethereum looks like a huge trap for bears,” he wrote. “I expect we can reach $5,000 by the end of the year.”
Another popular trader, Gordon, even predicted that investors will experience “one of the biggest reversals ever” on Ethereum.
The currency was still at almost 4,740 dollars at the beginning of October, but has lost considerable ground since then. According to optimistic analysts, a return to that level could be possible, especially if the selling pressure on the market decreases further.
Decrease in supply at trade fairs
Another argument for a recovery is the shrinking supply of Ether on crypto exchanges. When fewer coins are available to sell, it can drive up the price. Several market analysts see this as an indication of a so-called ‘supply crunch’, a situation in which demand exceeds the available supply.
In addition, investor sentiment has remained remarkably positive, despite the weaker week. According to data from Santiment, a clear increase in optimistic messages about Ethereum was measured on social media on Thursday, just as the coin was recovering slightly.
Fear dominates more broadly in the crypto market
Yet the general mood in the crypto world remains cautious. The Crypto Fear & Greed Index, which measures market sentiment, stood at 24 out of 100 points on Friday, corresponding to the “extreme fear” category.
That means many investors are still cautious, especially after Bitcoin’s recent correction, which dragged the broader market lower. Historically, however, November has been a favorable month for crypto.
Since 2013, November has been the best performing month for Bitcoin, with an average return of 38 percent. For Ethereum, the average is lower, around 5.7 percent, but previous bull markets show that recovery movements can often be rapid.
Calm before the storm?
According to analysts, the current price level could be an accumulation phase, with large investors quietly adding to their positions in anticipation of the next rise. If the Ethereum price manages to close above $3,500, this could be a bullish signal that the low point has passed, according to technical traders.
Although uncertainty in the market remains high, analysts such as Van de Poppe see opportunities. “This is still an excellent time to build positions,” he said.
Source: https://newsbit.nl/ethereum-geeft-koopsignaal-analisten-verwachten-een-stijging/
