Is ETH Undervalued?

tradealert (60)in #ethereum • 6 years ago (edited)

Hi traders, let's talk about Ethereum,

Ether.

After overshooting our price prediction by $10, Ether finally found resistance just north of $220 due to a lack of market interest coupled with a strong correlation with Bitcoin which also corrected.

Ether is now trading at $205 (ETH/USDT, Bitfinex) at the time of writing and contemplating the possibility of a bounce which could, assuming the best bullish conditions, send it back to the point of control (horizontal red line) right around $300.

This bullish set-up also shows on the less liquid ETH/BTC (Binance) pair which reveals Ether bouncing off a previously tested zone of support on a nice hammer candle.

Realistically however, Ether is still very much correlated to Bitcoin and under strong selling pressure from ICOs, lots of which have been unloading quite a lot of Ether this past months and could continue if Bitcoin decided to drop below $6000.

At this stage it feels like Ether is finally fairly priced relative to Bitcoin with regard to their respective market caps.

But possibly underpriced relative to the number of transactions on the network.

With CBOE's Ether futures contract possibly coming before the end of the year (December?), it's anyone guess whether or not this divergence will incite traders to long Ether or to drive a nail in its coffin.

At the end of the day, I suspect a futures market would likely increase the volatility of Ether just like it did Bitcoin's

In the long run however, it could also lead ETH to de-correlate from BTC which would allow each market to reflect the true strength of their underlying asset.