Ethereum is likely to perform extremely well in 2021, analysts say despite the recent rapid drawdown in ETH’s price.
The coin currently trades for $350, around 30% below the recent year-to-date highs of $490, set just a few weeks ago. Ethereum’s strong move lower was a result of a correction in the Bitcoin market, along with a rapid slowdown in the utility of leading decentralized finance platforms.
Ethereum To Perform Really Well in 2021
Speaking on Ethereum’s potential in 2021, Brave New Coin’s Josh Olszewicz recently noted that the Ichimoku Cloud on the weekly has flipped green for the first time since late 2018. The Ichimoku Cloud is an indicator that shows the trends of an asset and important levels to watch.
Olszewicz believes that the Ichimoku Cloud flipping green will mean that Ethereum will perform “extremely well” in Q2 of 2021:
“1W $ETH. Cloud green for the first time since late 2018 this bodes extremely well for Q2 2021.”
The Cloud is somewhat of a leading indicator, in that it predicts trend changes in the future as opposed to providing insights about the current trend.
Chart of ETH's price action over the past few years with analysis by crypto trader josh olszewicz (Carpenoctum on Twitter). Chart from TradingView.com
Expect Downside in the Near Term
While Ethereum may perform well in 2021, analysts are expecting short-term weakness likely towards the $300 lows last seen at the start of September.
Referencing the chart below, the head of technical analysis at Blockfyre, a crypto research firm, recently said:
“Looks way more bearish SHORT term I 100% will go all in if this is given. It is my bullish invalidation point and thus optimal entry. More blood yet to come imo. Buy lower grey box or buy LH reclaim flip to support.”
Chart of ETH's price action since the start of 2020 with analysis by crypto trader/head of technical analysis at Blockfyre, Pentoshi (@pentosh1 on Twitter). Chart from TradingView.com
There is also some uncertainty about all markets due to stimulus talks being paused by President Trump. There are rumors that stimulus talks are being restarted but there haven’t been any concrete moves from both sides just yet.
Featured image from Shutterstock Price tags: ethusd, ethbtc Charts from TradingView.com Ethereum Is Likely to Perform Really Well in 2021 Due to Ichimoku Signal