27 Sep Is Ethereum ready to rise again?
On September 12, Fundstrat CEO Tom Lee and his research colleagues said altcoins were ready to start a long-anticipated rally.
Since the start of the “altcoin season”, the market cap for the top 10 tokens initially rose 24%, in particular, Ripple (XRP, +94%) and Cardano (ADA, +32.7%). More recently, Bitcoin Cash jumped 40% within 48 hours.
Ethereum has underperformed other cryptos
When compared to other altcoins, Lee says Ethereum has underperformed substantially since September 12, 2018.
“2018 has not been kind to Ethereum. The bear case for ETH has been building for much of the year, essentially grounded on the notion that as ICOs slow, the need for holding ETH is diminished. And, given roadmap issues, the ETH outlook looks weak compared to other platforms,” he writes in his latest newsletter.
Lee says rumors of ETH “going to zero” have led to renewed selling and subsequent ERC-20 “panic” selling as developers tried to maintain the value of funds raised for their projects based on ERC-20.
The analyst says in four previous times where Ethereum has underperformed this badly, a large rally followed.
Can Ethereum reverse direction?
Fundstrat Technical Strategist, Rob Sluymer says ETH still has a challenging technical picture and is still firmly in a pronounced downtrend.
Lee maintains that sentiment is currently and unnecessarily overly negative on ETH.
Based on the four previous historical rallies, Lee says he’s optimistic ETH will see a recovery during the altcoin season’s broad comeback. “We expect ETH to begin a strong rally, in connection with the altcoin season rally (which could be short-lived).”
As always, analysts have mixed views and timing for recovery of any asset, let alone cryptocurrency which is always a challenge to predict.
The markets and many who raised ICO funds based on ERC-20 would welcome even a short-lived recovery of Ethereum’s market cap. Let’s keep an eye on this one and hope that Lee’s technical analysis is on target.
Visuals courtesy of Fundstrat