Macro factors have put a lot of pressure on the ability of cryptocurrency assets to perform. Thus, resulting in a cascading effect on their prices. For example, the second-largest cryptocurrency Ether has fallen nearly 5% over the past week and dropped $3,000. The asset has lost nearly 40% of its value since hitting an all-time high in November. Thus, forcing many analysts to rethink the bullish outlook they held earlier.
In fact, Finder.com’s most recent Ethereum price prediction report “is far more bearish.” Curiously, the analysts have significantly lowered their price expectations when compared to the previous predictions. Interestingly, the October report had predicted ETH to hit $5,144 by the end of 2021. However, at the time of the second survey in January, ETH was far below that price point.
Analysts now expect a year-end price of $6,500 for ETH, with $10,810 as the target for 2025 and $26,338 for 2030. The report further states:
“The panel’s prediction of the value Ethereum may reach by 2030 has been dialled back significantly. The positive outlook for price growth in the cryptocurrency market was heavily affected by increasingly tightening international regulations and tumbling current values in early 2022.”
CoinFlip founder Daniel Polotsky, for example, believes that the price of ETH will only reach $4,000 by the end of 2022. Mainly due to the strong performance of its competitors. It should also be noted that the current usefulness of ETH depends on the success of Layer 2 solutions such as Polygon, which Daniel believes will derive much of the value from ETH. This outlook can be credited by looking at the price appreciation of the two assets over the past year. Polygon’s MATIC is up around 1394% during this time, compared to ETH’s modest 62% gains.
Polygon has become an integral part of Ethereum’s ecosystem in 2021. MATIC has started to branch out on its own, and analysts are worried it could pose competition to ETH going forward.
Ethereum’s high transaction fees have recently come down. In fact, on February 13, it hit its lowest level since July of last year. Although, for all the negative reasons. According to Santiment, this drop in fees is due to the price depreciation that ETH has been facing lately. And, also due to the subsequent drop in demand for transacting ETH.
Similarly, a significant drop in large token holders has also been noted on the network recently, indicating that ETH large holders might be exiting the network en masse. Addresses holding over 1,000 ETH have been touching lows not seen since 2018. Thus, indicating that the price dip is being accompanied by whale dumping.
