After a disastrous start to the year, Ethereum looks to recover some of the lost ground and is up 50% in just a few weeks.
Ethereum begins to recover some of the lost value
While in the first six months of the year Ethereum was one of the worst-performing assets in the crypto sector, in recent weeks it has been showing important signs of revival, with a recovery of almost 50% from the lows, which had brought it below $1,000.
In just a few weeks, Ethereum’s price has returned to above the very important $1,500 level and is still showing signs that could indicate a further rise through the end of the year. Many analysts predict that ETH could reach and exceed $1,700 by the end of the year, then rise again to $4,000 by the end of next year and exceed $14,000 in 2025.
After touching $4,100 on 27 December, Ethereum began a slow descent at the beginning of the year that continued more steeply after Terra’s collapse in May.
This rise has several reasons, first among them, according to most experts and analysts, is related to the release of the Merge update, scheduled for 19 September next year. The new update is expected to introduce the new consensus method based on Proof of Stake, which is much more sustainable and economical than the current Proof of Work.
The second factor that certainly may have influenced Ethereum’s incredible recovery is the fact that having suffered very heavy declines, once a recovery in the markets started, as has been happening in recent weeks, it was able to benefit more. The fact that it had touched $1,000 evidently set off a series of automatic orders that quickly dragged the stock to higher prices, triggering a chain reaction that has supported the stock in recent weeks.
The reasons for the recovery and the short-term outlook
On the other hand, it is worth considering that in early January 2021 the price of Ethereum hovered around $1,000, only to have that sensational surge that led the stock to touch its all-time high at over $4,800 in November.
However, according to some analysts, Ethereum has been drawing a clear bearish reversal signal in recent days, and thus some are predicting that the crypto could fall back even quite sharply in the coming days.
Nonetheless, Ethereum has always still been considered by many experts to be the cryptocurrency with the greatest potential for growth in the medium to long term, precisely because of its features and applications that make it more attractive in the eyes of investors, even compared to Bitcoin itself, whose mass adoption still seems a long way off.
And this is also why excessive drops in the cryptocurrency as in recent months have led many investors, in the climate of absolute uncertainty, to buy Ethereum, which could actually outperform the market if it recovers.