Ethereum (ETH) Price Forecast for 2020: Will the ETH/USD continue to rise in Q4? - FX Leaders

Ethereum (ETH) Price Forecast for 2020: Will the ETH/USD continue to rise in Q4?

Posted Tuesday, September 15, 2020 by
Arslan Butt • 6 min read

Cryptocurrencies are used as an inflation-resistant hedge, due to their decentralized nature. The economic effects of the coronavirus outbreak have sent investors in search of assets that can offer shelter during the stock market fluctuations. The reason behind the recent surge in the second most popular cryptocurrency was due to the uncertainty that has persisted in connection with the unprecedented monetary easing programs by the Federal Reserve.

The world’s second-largest cryptocurrency, Ethereum, has seen an explosive price performance in the past three weeks, with the currency rising from $ 232 to a local high of $ 407.

The  developers of Ethereum launched the final testnet of ETH 2.0, which is known as Medalla, on August 4. Currently, over 20,000 validators have joined the network, and 3,670 are in waiting mode. The network does not support the real ETH; however, more than 650,000 test coins have been deposited for staking purposes. 

Medalla will not use real ETH, nor will it earn real staking rewards. The network is exclusively aimed at preparing the second-largest cryptocurrency, in terms of capitalization, for the transition to the proof-of-stake consensus mechanism.

Furthermore, on Thursday, the digital currency asset manager, Grayscale, said that the firm has publicly filed a Registration Statement with the Securities and Exchange Commission (SEC), on Form-10, for the Company’s Ethereum Trust.

Current ETH/USD Price:  $

Recent Changes in the Ethereum  Price

In recent times, Ethereum has become one of the best performing coins, after regaining from $ 90 in March, to $ 407 in August. Earlier this week. After an extremely strong rally for the past two weeks, the ETH rose, posting gains, but it printed a reversal sign in the late sessions, followed by the technical correction, which is still ongoing. From June to July, the ETH/USD showed a surge by 53.58%, of which most gains were earned in the last two weeks of July. In the first week of August, the ETH/USD prices declined by 2.16%. In turn, this poses the following question: what is the Ethereum price forecast likely to be?

Ethereum  Forecast: Q4 2020Ethereum  Forecast: 1 YearEthereum  Forecast: 3 Years
Price: $ 602
Price drivers: 38.2% Fibonacci retracement, Boosted safe-haven appeal in gold, BTC (positive correlation).
 
Price: $ 760
Price drivers: 50% Fibonacci Extension, COVID19 Recovery, Fed Rate Cuts
Price: $ 1,136
Price drivers: 50 EMA support, W Pattern completion 

Ethereum Live Chart

ETH/USD 

ETH/USD Factors Impacting Ethereum Prices

Ethereum (ETH/USD) is the second-largest digital asset, with a sum of $ 43.4 billion in market capitalization and an approximate $ 11 billion in daily trading. The rise in ETH/USD prices could be attributed to the increased blockchain activity, which has led to a rise in Ethereum transaction fees, to the highest level since 2018. Since then, the prices of Ethereum have remained on the bullish track, and recently, they crossed the $ 400 level, which is the highest since August 2018. Let’s discuss the Ethereum predictions according to various sources.

In the past year, Ethereum has survived in the face of fierce competition. While hard folk transition pushed it down, the DeFi boom shored the ETH up at an unfortunate time. The highly anticipated proof-of-stake transition and Ethereum 2.0 are providing support in 2020.

The following are some factors that have been mentioned, that will impact the price of Ethereum in the future.

  • The earnings made from Ethereum blockchain transaction fees
  • The high potential for using Ethereum as collateral in financial applications in Decentralized Finance (DeFi)
  • Its use in mainstream payment channels, like point-of-sale and online shopping
  • The ETH tokens, decentralized exchanges and reward programs 
  • The speculative trading of the cryptocurrency

Reddit Co-founder Alexis Ohanian – $ 1,500

In the crypto realm, the words of Reddit co-founder, Alex Ohanian, carry much weight. He is very optimistic about the future of BTC and other cryptocurrencies. He says that he is most bullish about Ethereum, simply because people are actually building on it. He forecasts that the coin’s value will rise, eventually hitting the $ 1,500 level. As per his interview with Forbes, he loves Ethereum because developers are creating real-world projects in the blockchain.

deVere Group CEO, Nigel Green $ 2,500

The head of deVere Group, Nigel Green, is exceptionally confident that the ETH price will reach $ 2,500 in 2020. He bases his forecast on three fundamentals: the rise in popularity and usage of smart contracts and the higher demand for digital currencies, and he believes that DeFi will boost ETH/USD prices.

Online Analyst, Bobby Ullery – up 700%

The online analyst, Bobby Ullery, believes that blockchain technology will soon play a much bigger role in international trade and the overall economy. He says that Bitcoin and Ethereum will each hold 25% of the entire crypto industry. He predicts that the total market capitalization of both top cryptocurrencies will reach $ 4.5 Trillion in 2020. This  means that, for his prediction to come true, Ethereum will have to rise by over 700% by the end of this year.

Founder of Ark Capital, Brian Schuster $ 100,000

The head founder of solutions at Ark Capital LLC presents a lofty picture of Ethereum – he believes it will reach a price of $ 100,000 per coin. He said that ETH will ultimately be used as a replacement for gold, as a value store, and that it will reach a whopping $ 100,000 per coin. He also said that Ethereum’s platform capabilities might eventually lead to it becoming a sort of digital motherland for all future currencies.

Fractal Analysis – Ethereum could surge past $ 1,000

The trader/analyst, known as CryptoWolf, shared a twitter chart showing Ethereum’s macro price action, from the highs of  2018 until now. The results were almost identical to Bitcoin’s price activity, from the 2014 highs to the start of the 2016-17 bull run.

The so-called “Fractal Analysis” predicted that Ethereum would rally past $ 1,000, most likely in the middle of 2021 or towards the end of that year. The trader who made this prediction is the same one who predicted, just days after the March crash, that BTC was likely to bounce back to the pre-crash level. He also predicted the ongoing ETH breakout.

Bitcoin vs. Ethereum

This week, Ethereum prices have declined by 2.16%, on the back of correction and profit-taking of the last two weeks, when Ethereum rose by 64.21%, to the 12-month high, above the $ 400 level. On the other hand, this week’s Bitcoin prices recovered to their 2020 high of $ 11,392. The correlation between Bitcoin and Ethereum sits at 0.68, as per the CoinPredictor report. This correlation was estimated on the basis of the price fluctuation of both cryptocurrencies over the last 100 days.

However, the team at Skew said that the short-term correlation between Ethereum and Bitcoin was gradually decreasing. The drop could signal the end of a 3-year high correlation between BTC and ETH. Ethereum’s correlation with Bitcoin dropped significantly in 2017 and before the  crypto-wide bullish cycle.

According to Bloomberg, the outlook for Ethereum remains unimpressive. They referred to its rally as “speculative”, stating, in contrast, that the rise in Bitcoin was based on solid ground. The report suggested that Ethereum was facing plenty of competition from similar crypto platforms and about 6,000 tradeable coins. Bloomberg remained consistently bullish about the Bitcoin, stating that its gold-like qualities and increased institutional demand have caused a surge in its prices.

They attributed the appreciation of Ether to the success of DeFi space, as with other smart contract platforms; the competition will only get tougher. The point is that, when it comes to the world of professional investors, Ether does not have a clear selling point, like Bitcoin’s limited supply.

On Friday, Weiss Rating dethroned Bitcoin and placed Ethereum as the top cryptocurrency. The rating firm updated its overall digital asset rankings, based on factors including adoption, technology, market momentum and investment risk. Weiss placed Ethereum in the first spot, followed by Bitcoin (BTC), Cardano (ADA), Litecoin (LTC) and Stellar (XLM).

US Dollar and Ethereum

The rise in Ethereum could also be associated with the inflating US dollar, triggered by the fears of a collapse of the US economy. The overheated stock market and the failure of the US government to agree on a COVID-19 stimulus package, have urged traders to invest more in the safety of hard assets, such as gold, or cryptocurrencies like Ethereum and Bitcoin. 

The Ethereum may finally be ready for another bullish sentiment, as the developer of Ethereum, Hudson Jameson, expects that the growth in the number of validators will resume. He is encouraging much hype around the upcoming ETH 2.0 launch.

Technical Analysis – Can We Expect a Bearish Correction in Ethereum – ETH/USD?

Speaking about the technical side of the market, Ethereum is trading with a solid bullish bias, having soared to the $ 422 level. In the monthly time-frame, the Ethereum has violated the double top resistance level of $ 300, and it is also crossing over the 23.6% Fibonacci retracement level of $ 400. The recent bullish engulfing candle on the monthly time-frame suggests strong odds of further buying in Ethereum.

Taking a look at the long-term forecast for Ethereum, the second most traded crypto pair seems bullish. On the higher side, Ethereum may find its next resistance at around $ 602, which marks a 38.2% Fibonacci retracement, while a bullish crossover of $ 602 could lead the Ethereum price towards $ 761.50. Above this, $ 911.46 is likely to work as the next resistance.

ETH/USD Bullish Engulfing, RSI and MACD – All Suggest Buying

On the monthly chart, the 50-periods Exponential Moving Average suggests a strong bullish bias, but at the same time, it also suggests solid chances of a bearish correction, as its value remains at a level that is far removed from the current market price of $ 265.

ETH/USD Fibonacci Retracement 

Regarding the Ethereum price forecast in mid-2021, we can expect Ethereum prices to drop to $ 600, in the wake of a bearish correction, especially after completing a 50% Fibonacci retracement. Right after testing the support level of $ 600, the ETH/USD price could soar even higher, until $1,142, in the years ahead. Recent bullish engulfing, triple bottom support at $ 87, and a series of Doji candles above this level all support the bullish bias in the ETH/USD.

ETH/USD – 3-Year Forecast – Bullish Bias Dominates

In this update, we explored a lot of breathtaking forecasts and opinions by some famous specialists within the crypto space. Each of them has a strong argument in the store, making it all the more fascinating to observe what’s about to unwind near the end of 2020. Those who see a bullish event are currently playing tug of war with those who foresee a bearish development. Let’s brace for the second half of the year, keeping a closer eye on the fundamental side of the market, in order to capture any change in Ethereum sentiments.

Good luck! 

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.