Where is the next stop for Ethereum? Is it actually undervalued?

$1000!? Wow! Or..is it really that much? Let's try and find out if we can argue for much higher prices.

 

 

I know numbers, and especially high ones have some "magical" effect on us. One thousand! Wow! That's a high number. Three zeroes. One ETH is really really expensive..

But since you are a person who's been on the investing scene for more than a week, and your IQ is higher than that of a peanut, or the mainstream media for that matter, you understand that the price doesn't mean anything unless we look at other more important things.

Technical

First, we can look at the pure technical details. What would you like to compare Ethereum to? Dollar? Sure, Ethereum is over 1000$ USD. But first of all, USD has fallen relative to for example the norwegian krone and the Euro. Sure, it's still up, but does it make the most sense to look at it relative to Fiat-currency?

Or should we look at it compared to for instance Bitcoin?

So if we look at the price in terms of Bitcoin, Ethereum peaked in mid-june at 0,15 Bitcoin per ETH. It's at 0,07 Bitcoin right now. The fair price for Ethereum right now would be more like $2250 than $1050.

If we look at Ethereums market dominance, it's at almost the lowest it has ever been. And also interestingly, it's dipping very low in it's usual step-pattern. As you can see, it moves up in steps, like a ladder.

As you can see, in January 2016 it spiked. Then it peaked in March. Then it slowly declined for about a year, just to repeat the same pattern again. And it's done that three times before that as well. It goes up, and comes back down.

Even looking at the last month, I wouldn't exactly call it "price action"..

Ethereum is actually veeery passive and undramatic.

Also, it passed $100 billion market cap for the first time, which probably and most likely was a resistance level.

 

Fundamentals

One reason is of course that there is a large number of ERC20 ICO's being launched on Ethereum this month. Another reason is that as Bitcoin cool down and Ripple is slowly dumped (I think it will be) mainstream will give Ethereum, or is giving Ethereum some attention again. It's been quite quiet around Ethereum in the mainstream. I've even seen some mainstream articles on Cardano and IOTA every now and then when they're not bashing Bitcoin. But Ethereum? Nah..not much.

Other than that I can't see any significant news right now, so I assume it's a long overdue technical driven correction upwards for Ethereum.

Next stop?

I think it's fair to say Ethereum is undervalued at this stage. I see The Merkle and also more mainstream media talk about it's "amazing gains" the past 24 hours. But we've argued why this gain was well overdue, and that it's still very undervalued. I have target of $2000 within 3-4 months on ETH.