- Ethereum could see a 17% increase, potentially reaching $2,817, if it successfully maintains a move above the $2,395 resistance level.
- Despite recent underperformance, Bitwise’s Matt Hougan views Ethereum as a strong contrarian bet, highlighting its significant role in the crypto market and potential for a rebound.
Ethereum (ETH) has recently experienced a modest 2% increase as the crypto market anticipates a significant 50-basis-point interest rate cut by the US Federal Reserve. The altcoin’s performance aligns with a broader rally in cryptocurrency assets, driven by optimistic economic forecasts. However, Ethereum’s journey in 2024 has been a rollercoaster, overshadowed by Bitcoin and Solana’s impressive gains.
Bitwise’s Contrarian Thesis on Ethereum
Despite Ethereum’s recent underperformance compared to its peers, Bitwise’s Chief Investment Officer, Matt Hougan, presents a contrarian view. In a recent memo, Hougan argued that Ethereum still harbors considerable upside potential. He acknowledged the skepticism surrounding ETH due to regulatory uncertainties and competition from newer blockchains like Solana. Yet, he highlighted Ethereum’s dominance in several critical areas, including:
- Hosting over 50% of the total stablecoin supply
- Controlling 60% of the total value locked (TVL) in DeFi
- Being the platform for significant projects like Polymarket
- Attracting major traditional companies such as BlackRock and Nike
Hougan likened Ethereum to “Microsoft of blockchains,” suggesting that despite emerging technologies, Ethereum remains a powerhouse in the crypto space.
Technical Analysis: Ethereum’s Path Ahead
Currently trading above $2,330, Ethereum is eyeing a critical resistance level at $2,395. If ETH can sustain a high volume move above this threshold, it could pave the way for a potential rally of up to 17%, targeting the $2,817 range. The 4-hour chart indicates that a successful breach of $2,395 could see ETH test this upper resistance.
On the flip side, if Ethereum faces rejection at these levels, it may decline toward the $2,200 support zone. The Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) are currently showing strong buying pressure, suggesting bullish momentum in the short term. However, a daily close below $2,111 would negate this bullish thesis.
As Ethereum navigates these technical and market challenges, Bitwise’s perspective provides a fresh outlook on its potential. While past performance and external factors have created hurdles, the current technical setup and market conditions suggest that Ethereum might be poised for a significant rebound. Investors should keep a close eye on the $2,395 resistance and market developments for potential signals.