Short term price analysis:
Total market cap behaviour
So it finally happened – the looming breakdown of bitcoin below $7k and overall market slump. We have been talking about it for the past month or so and the scenario we kept predicting seems to be unraveling.
One note: below numbers for total market cap are from Tradingview and has a discrepancy of around $8 billion to CMC data.
The total market cap seems to be dropping to our predicted zone of $162 billion – it stooped all the way to the current $178B before (data by Tradingview).
Right now, there is no significant support zone to stop the bleeding before the aformentioned $160 billion.
I would argue that total market cap chart is the most important one to pay attention to as it is a leading force and direction picker for all coins, bitcoin included.
As you can see below, Fear & Greed Index is still in the extreme fear zone with chances of dropping even lower being significant. Sentiment of the market is important element when assessing the future behaviour.
ETH/USD Price Analysis
ETH liked to hover around Fib782 (high-low swing from June-November) which is around $182. However, it seems to have lost footing on that level and is now touching the support at $132.
On November 25th, ETH fell to local low of $132 before bouncing back up to $149. That was a short-lived mini rally and ETH, by simply following the rest of the market, seems to be on the verge of dropping to local lows of $132.
Should ETH fail to hold onto this level, which is very likely, next stop is almost certainly $109, a support level ETH built back in February.
Below is our long-term ETH price prediction
This Ethereum price prediction is about the long-term growth potential of ether.
Can the world’s second largest crypto currency maintain or even improve its position in the next 5 years? What are the arguments in favour, what are the arguments against?
The future potential of Ethereum could be enormous. Some voices also speak of Internet 3.0, the Internet of values, the Internet of tomorrow. Considering the possibility of creating your own dApps and DAOs on the platform, that’s not that far-fetched.
For the preparation of the Ethereum forecast it is important to get a short overview of the most important data about the crypto currency. Ethereum was founded in 2015 by the Russian-Canadian developers Vitalik Buterin and Charles Hoskinson. Etherum is the second largest crypto currency in the world in terms of market capitalization. An overview of the current market prices can be found, for example, at Etoro.
Ethereum is considered the second generation blockchain. Crypto currencies like Bitcoin, which are called first generation blockchains, are mainly used as money value storage and transfer systems.
Ethereum proponents, on the other hand, believe that the blockchain can do much more than that and see it as the future of the Internet. The Ethereum Blockchain was the first to integrate Smart Contracts, enabling the creation of decentralized applications (dApps).
The fundamental potential
It is difficult to predict the future of a venture. It is quite possible to consider plausible interpretations of possible future developments based on a company’s roadmap. However, they remain in the realm of speculation. Ethereum enables its customers to develop their own decentralized applications (dApps) and even entire decentralized, autonomous organizations (DAOs). What this can mean will be illustrated by three application examples that have already been implemented.
KYC-Chain for companies
KYC is an initial word which stands for “Know-Your-Customer”. This approach should enable institutions, such as banks, stock exchanges, insurance companies and enterprises, to know their own customer base, but also to enable the customer to establish a trustworthy connection to a provider. The focus is on the exclusion of customers with malicious intentions, but also the prevention of identity theft. A KYC approach is usually implemented through several stages of verification. The more information is given, the more trustworthy a customer is.
KYC-Chain offers an interface between customer and company based on the Ethereum blockchain. Via Smart Contracts, customers can transmit personal data to a company in encrypted form. During the verification process, customers can use the blockchain to decide for themselves which information they want to disclose. Companies can demand specific information from customers in order to get an accurate picture of their own customers. If both parties reach a consensus on a customer’s identity, a trusting relationship between both parties becomes possible. KYC-Chain not only protects customers from identity theft on the Internet, it also enables a trusting business relationship between customers and companies. In addition, it increases the awareness of data which users disclose about themselves on the Internet.
The Enterprise Ethereum Alliance
The Enterprise Ethereum Alliance is an alliance of over 30 companies from around the world. Two of the most well-known companies are Microsoft and JPMorgan Chase. The alliance of companies can be considered a DAO. Together, the companies are working on a platform that enables them to exchange encrypted information in real time. This kind of platform can be seen as a kind of Wikipedia for customer data, financial flows and cooperation offers. The Enterprise Ethereum Alliance does not aim for its own profit, but focuses exclusively on a better, more transparent and more secure data flow. This can save up to 12 billion US dollars annually, which can be used to maintain an infrastructure between companies.
For example, if Microsoft wants to enter into a contract with JPMorgan Chase, JPMorgan Chase can simply enter their own computer needs on the Ethereum blockchain. Microsoft can then directly view online on the shared platform how many computers JPMorgan Chase needs and set contract terms in a shared smart contract. If the computers are then delivered, JPMorgan Chase can pay Microsoft directly via the Smart Contract. It is also conceivable that both parties can view the delivery process via the blockchain. In general, the Ethereum platform is attractive to DAOs because it saves infrastructure costs, ensures a fast flow of information, makes it easy to establish joint contracts and provides consensus mechanisms.
The Colony Platform
Colony is a platform which brings together employers and employees on one platform worldwide, decentralized. The platform is based on the Ethereum blockchain and enables entrepreneurs to put together a team for their own projects. It does not matter from which country an employee comes, but only how talented that person is. The person who brings the most suitable talent for a project is given a job via the platform. In this way, interested parties can establish a contract with a company via the Colony platform and be paid for it. It is also possible to evaluate employees after completion of tasks. The higher the rating, the more likely it is to receive a new assignment.
A marketing company from Germany, which would like to expand on the asiatic market, can lock a contract with a marketing expert from Japan over Colony. This offers both parties a distinct advantage. The company receives a talented marketing expert from Japan who is familiar with Japanese culture and language. For the marketing expert, this means that he can accept orders from all over the world without having to introduce himself locally. He can be fully notified and paid via a Smart Contract. This employment relationship is possible thanks to the Ethereum blockchain.
Ethereum price prediction: the most important factors
The price development of Ether (ETH) can be influenced by many different factors. The following factors point to a bad Ethereum forecast or could at least cause a sideways movement:
Scalability: Currently, the Ethereum blockchain manages about 15 transactions per second. This is not nearly sufficient for a broad application. If Ethereum continues to grow like this and more and more applications and smart contracts are created, bottlenecks will occur in the long run. Users were able to get a taste of this during the introduction of cryptokitties.
Competition: Ethereum was the first blockchain of the second generation, but it is not the only one today. Projects such as NEO, Tron and EOS offer similar services and want to claim the same niche for themselves. NEO, for example, manages 10,000 transactions per second and has a better consensus algorithm. Ethereum therefore has to come up with a number of ideas in order not to be left behind by the competition.
Despite the above-mentioned disadvantages, there are many points in favour of a positive development of the ETH price:
Reputation: Ethereum is one of the older blockchains on the market. Since 2017, the company has been able to maintain its second place in terms of market capitalisation without interruption.
Stability: Like all other crypto currencies, ether is subject to the usual price fluctuations and is also influenced by bear and bull markets. But in comparison to other crypto projects, the volatility is much lower.
Growth potential: The number of dApps is growing continuously. Many startups and developers build their applications on the Ethereum blockchain. According to the dappradar.com ranking, more than 1500 dApps have been created on Ethereum so far. No other blockchain has more.
Functionality: The Ethereum Blockchain offers a wide range of possible applications. Smart Contracts and dApps are used successfully in countless industries. This creates a healthy demand, which can have a positive effect on the Ethereum forecast.
Government support: The Canadian government wants to investigate how it could use the Ethereum Blockchain for government administration purposes. If Canada is successful with this move, it would be a signal to other nations to do the same.
Solutions to the scaling problem: Ethereum’s developers are aware that their blockchain can only survive in the long run if they can address the problem of scalability. That’s why they’ve been working on ways to solve this problem for quite some time. Among other things, they are relying on a shift in the consensus algorithm from proof-of-work to proof-of-stake. Other measures include the introduction of the plasma protocol and sharding, on which the company is working. With Ethereum 2.0, the developers have taken the first step.
Ethereum price prediction 2020 to 2025: Long-term estimates in figures
Now that the most important arguments for and against long-term success have been discussed, it is time to look at the Ethereum forecast in figures. Crypto forecasts, like all other speculations, are not an exact science, so there is no guarantee of accuracy. The following predictions are very different because they are based on different prediction methods.
Walletinvestor: Walletinvestor’s prediction is based on a technical analysis. The Forecast website concludes that ETH is not a good long-term investment. According to their assessment, ether will only be worth about US$22 in a year. This corresponds to a price decline of around 92 %. This trend will continue in the next 5 years, so that 1 ETH will cost about 4 US$ in June 2024.
Coinswitch: Coinswitch’s forecast is based more on market developments and economic factors. In contrast to Walletinvestor, the assessment here is much better. In their estimation, 2020 is an important year for Ethereum. The acceptance of dApps will increase significantly this year and thus positively influence the price. ETH reaches its highest level of the year at around US$ 2,600 during the second quarter of 2020. By the end of 2020, the price will drop slightly and settle at US$ 2,480. Until 2025 the Ethereum forecast states that the price of ether could be US$ 3844.
Cryptoground: Cryptoground’s Ethereum forecast uses historical data and evaluates it through its internal deep learning algorithm. The Forecast website assesses the price development for ETH as positive. In one year, the price for ether will be around US$389. This corresponds to an increase of 35.73% compared to the current price. In 5 years the price would be at 1.57