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Ether (ETH) has dipped with the rest of the crypto space this past month, but struggles to make new lows recently. Is the bear run over and will bulls start hopping in long on ETH/USD?


ETH/USD Daily Crypto Chart
ETH/USD Daily Crypto Chart

Ether (ETH), the native token of the Ethereum blockchain, the current smart contract king  with over $180B of value locked in the network. Like the rest of the crypto space, though, ETH/USD has fallen hard since hitting all-time highs just under $5,000 back in November, now creating several price action arguments that may draw in potential technical buyers.

On the daily chart above, we can see the market is now holding steady after the bears were unable to break below the $3,800 handle. This area coincides with the rising ‘lows’ pattern, and when combined with an apparent bullish divergence pattern forming with stochastic, there’s a strong argument that technical bulls may start running back into the mix.

Fundamentally, Ether is likely to continue to draw in capital as institutional adoption of crypto assets will likely accelerate in 2022. Ether especially as Ethereum is still the largest, most used smart contract network, the most secure, and has the longest history. And with the community taking the next step towards Ethereum 2.0 with the release of the Kintsugi Testnet, a move to a more efficient, scalable and cheaper network may be not too far away.

These features and developments will likely continue to draw in capital for the foreseeable future, and when combined with the deflationary mechanisms introduced in EIP-1559, the odds of longer-term price appreciate are probably better than 50/50.  That makes the dips like the one we’re currently seeing possible magnets for longer-term players looking for ETH at better prices.

Of course, exogenous events (e.g., like the 2020 pandemic), competition (LUNA, SOL, and AVAX are likely to continue to take some market share), and broad risk sentiment can influence any market out there, and if that’s enough to push ETH/USD below the rising trendline, then we’d be cautious about starting a long position in the short-term. And if the negative catalyst is strong enough, that could be a point where profit taking/fresh selling occurs.

Whatever scenario may play out ahead, Ether is definitely a crypto asset to always watch as its moves could influence the rest of the crypto space for the time being.

But what do you all think? Is this the next buying opportunity on Ether or is this a pause before a continued move lower? Let me know in the comments section below!

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