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Since getting to an all-time high of $4,800. Ethereum has been trading lower for the last week. However, the price seems to have found a support zone that could act as a trigger for another bull run.
Ranking as the second biggest and most popular cryptocurrency, Ethereum has gone from strength to strength this year.
This current fall is having some investors trying to understand how the price will play in the future. However, some analysts predict it could trigger another bull run pushing the coin to the $5,000 level and beyond.
Market fundamentals of Ethereum are strong enough to support such a price.
Naturally, cryptocurrencies are highly volatile. This is one of the reasons their prices keep rising and falling in huge margins.
Crypto Market Bear Season
The Crypto market has been on a bear run in the last few days. However, this is not unique to Ethereum as all the major currencies such as Bitcoin are also experiencing huge falls.
Normally, the market tends to move in a singular direction both in the rise and fall. There is a high chance if the price of Bitcoin is rising, the price of Ethereum rises as well.
Recent volatility to the downside isn’t unique but a normal market cycle that happens across all financial assets such as stock and Forex.
The Recent London Hard Fork Update
Recently, Ethereum did an update to its network targeting to make some fundamental changes. It is one of the major updates that have been done recently.
The update targets to make the coin deflationary through a coin-burning mechanism. Ultimately, this will cause the price to rise.
According to the data from the watchtheburn website, over 4 billion dollars worth of Ethereum coins has already been burnt. A huge step towards controlling supply.
The market will soon notice this and could result in a huge price rally potentially taking the coin beyond the 5000 dollars mark.
Changing the Proof of Work Concept
This was another target for the update due to the numerous challenges facing the traditional mining process of some cryptocurrencies and the huge amount of energy requirements.
Activists and governments have been associating mining with the use of unclean sources of energy. This has made it a matter of necessity for these coins to look for alternatives to gain more support.
After the update, Ethereum is shifting to the proof of stake concept which is expected to give it much-needed support. Staking will help in the creation of new coins without having to use a huge amount of energy. It is a move that will likely attract investors to invest in the coins due to its clean energy approach. Eventually, this will trigger a rise in price as demand increases.
Future of Ethereum
Ethereum has always been considered a key example of how cryptocurrencies should work. It leads to many blockchain innovations and continues to push the market forward.
As the second-ranking cryptocurrency, it has become an automatic alternative for investors that don’t need Bitcoin.