Nicole WillingAfter a disppointing couple of weeks expectations are high today (17 January) that the crypto world and with it the price of ETH, the ethereum coin, will continue its upward trend seen emerging last Friday.
ETH has been outshone by altcoin rivals after a slow and unpromising start to 2022 while other altcoins were showing off double digit growth. Today (17 January) the price of an ETH is $3,273 down more than 12% since New Year and despite an effort last week to shake off the doldrums failed to break a resistance level at $3,400.
On the other hand, FTM (Fantom’s native cryptocurrency) raced up 35% over the same period, NEAR, the native currency of another layer-1 blockchain built on the Near Protocol, is up 24%, Harmony’s coin, and ONE, was up by 50%.
Although a much bigger platform, Ethereum is often criticised for being slow and expensive – weaknesses these smaller-cap currencies are looking to exploit.
So, what is the Ethereum price outlook for 2022? Is there potential for the coin to climb to new highs, or could it shed value?
In this article, we look at the coin’s recent performance along with the latest price predictions from forecasters and analysts.
Ethereum advances blockchain upgrades for 2022
The Ethereum blockchain has been upgrading to Ethereum 2.0 throughout 2021, a project that will continue into 2022. The London hard fork, or split, in August introduced coin burning, which is expected to support the value of the ETH coin by reducing supply as its use grows.
The Altair upgrade was activated on the main network on 27 October. The upgrade to the Ethereum Beacon Chain tests the transition to proof-of-stake (PoS) block mining. The main Ethereum chain will merge with the Beacon Chain in 2022 to complete the Ethereum 2.0 upgrade.
The Arrow Glacier network upgrade will go into effect on 8 December, delaying the “difficulty bomb”, an increase in mining difficulty, until June 2022 as the blockchain transitions from proof-of-work (PoW) mining to PoS. Proof-of-work is the blockchain consensus algorithm used by bitcoin. It verifies block transactions and mines new coins by completing complex cryptographic calculations. PoS verifies transactions through validators that stake coins on the network, using less computing processing power and electricity.
“The Ethereum clients’ team wanted to avoid having to organise another pushback while working on the next big upgrade,” according to the Ethereum Cat Herders development blog.
“The difficulty adjustment process was put into place originally to facilitate the transition to proof of stake. Over time, it has gained the additional property of forcing those who want to keep running Ethereum to upgrade their nodes. This means that staying on the old chain is not an option.
Developer Tim Beiko wrote on 29 November:
Institutional interest in Ethereum continues to grow
Ethereum has attracted interest from institutional investors this year in line with the emergence of applications such as decentralised finance (DeFi) and non-fungible tokens (NFTs).
Ethereum saw outflows totalling $39.2m in the first week of 2022, according to CoinShares.
Investment bank JP Morgan is among institutions moving further into the cryptocurrency space. It gave away NFTs minted on Polygon, the Ethereum-based network, at its Crypto Economy Forum event, which have since been listed on the OpenSea NFT marketplace. Bank of America also recently created its first NFT, promoting its sponsorship of the Sibos conference.
Ethereum price rebounds from sell-off
ETH jumped to an all-time high of $4,859.50 on 10 November, with BTC spiking to its record high of $68,789.63 on the same date. But neither coin could sustain those gains, and the pace of decline accelerated in the remainder of November. The ether price fell to a low of $3,525.49 on 4 December but the price trend has since rebounded.
At the time of writing (17 January), ether was at $3,276. At that price the coin was down by 33% from the all-time high and has a market capitalisation of $390bn.
What’s the outlook for the future ethereum price in 2022? Is it still on track to reach new highs?
Ethereum price prediction for 2022 and beyond: Where next for ETH?
Technical ETH price analysis from CoinCodex showed short-term sentiment was bearish at the time of writing (17 January) with 10 technical analysis indicators giving bullish signals and 19 emitting bearish signals. There was technical support at $3,305 down to $3,219, with upside resistance from $3,391 up to $3,477, the data showed.
CoinCodex predicted the ETH price could move up slightly to $3,412 by 22 January.
Prominent traders and investors continue to expect the ether price to rise over the long-term with the continued adoption of the blockchain for dApps and NFTs. Billionaire investor Mark Cuban tweeted in October that he sees more potential for the growth in use of Ethereum than Bitcoin.
I like Eth/L2s more, and there is no point arguing the Trilemma, halving or inflation. I like it more because I can see an unlimited number of applications that will change the biz/consumer world forever. And to use them you need to buy Eth/L2. BTC doesn't have that demand pull
— Mark Cuban (@mcuban) October 17, 2021
Some market observers expect ETH to continue to gain value against BTC, with the ETH/BTC rate rising to its highest level since 2018.
An analyst known as Galaxy tweeted on 3 December that they expect ETH to “start going into parabolic mode”, adding on 7 December that they expect the price to reach $5,000 by the end of the week. On 15 December another optimistic Galaxy tweet read: "Probably one of the last few days we see BTC under $50k and ETH under $4k. Once we break-out from this accumulation it’s showtime."
I've been waiting and publicly charting ETH/BTC on the big picture for years, and now we are finally here.$ETH is about to start going into parabolic mode.
— Galaxy (@galaxyBTC) December 3, 2021
Just wait and see how crazy things are about to get. pic.twitter.com/t9JrKyjGg9
In early November, Goldman Sachs issued an ether price target of $8,000 by the end of 2021, if it tracks inflation expectations.
Investment bank Standard Chartered in September issued a long-term ethereum projected value target of $26,000-35,000 and a rise in the value of the ETH/BTC pair to 0.161, which would see the ether market capitalisation catch up to bitcoin’s.
But JP Morgan cross-asset research analyst Nikolaos Panigirtzoglou is bearish on the outlook for ether compared with bitcoin, noting the decline in Ethereum’s market share in DeFi applications.
In a recent report, Panigirtzoglou wrote that the substantial increase in Ethereum network activity that is already priced into the coin at the $4,000 level will not materialise and the price could plunge by 67% while bitcoin rises by 15%.
Wallet Investor’s ETH price prediction projects that ether could rise to $6,352 over 2022. Wallet Investor predicted the price could reach $18,492 in five years.
DigitalCoin’s ethereum forecast for 2022 was less bullish, predicting that the price could average $4,484 next year. For the longer term, the site’s projections based on historical data indicated that ETH could rise to an average of $6,877 in 2025 and $11,288 in 2028.
The long-term ethereum forecast from Price Prediction estimated that ETH could average $14,511 in 2025, up from $4,731 in 2022, and soar to $99,693 in 2030.
It’s important to keep in mind that cryptocurrency markets remain extremely volatile, making it difficult to accurately predict what a coin’s price will be in a few hours, and even harder to give long-term estimates. As such, analysts and algorithm-based forecasters can and do get their predictions wrong.
We recommend that you always do your own research, and consider the latest market trends, news, technical and fundamental analysis, and expert opinion before making any investment decision. And never invest more than you can afford to lose.
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FAQs
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