- Bitcoin and Ethereum have had a particularly good start to the new month after posting gains of more than 10 percent in the last 2 days.
- Pundits have made strong predictions for Q4 2021 for Bitcoin (BTC) and there’s plenty of reasons why Ethereum (ETH) could also post a remarkable performance at the same time.
Ethereum (ETH) has begun the month above the $3,000 psychological resistance level. The second-largest cryptocurrency by market cap has struggled with this position for the last few weeks. But now ETH has set a higher resistance after climbing above $3,200. Investors will be watching the $3,000 support closely as it points to the midterm to long term outlook. So far it looks like in the next few months the digital asset is likely to extend its positive run.
First, Ethereum’s correlation with Bitcoin is likely to extend. Pundits are already predicting an explosive run for the largest cryptocurrency by market cap. Stock to Flow model creator PlanB who nailed his September prediction of $43,000, has given his prediction for October. According to the analyst, the asset will continue climbing and cross $63,000 by the end of the month. If so, Ethereum is also likely to follow the same trend and climb as high as $4,000.
Ethereum (ETH) short squeeze
Since the Ethereum upgrade that initiated ETH burning of a portion of Ethereum’s network fee, over $1 billion worth of ETH has been burnt. With such a high amount out of the market, the classic demand and supply law dictates that this will boost prices in the future. On top of this, the total amount of ETH staked on Ethereum 2.0 has skyrocketed, surpassing $25 billion. The growth continues to strengthen the network which has come under great pressure and growing competition in the last few months.
Additionally, in recent weeks, there have been record high exchange withdrawals. CryptoQuant data shows that exchanges now hold only 18.1 million ETH compared with 23.73 million ETH from a year ago. This is a bullish sign from investors that indicates that they expect the digital asset to keep climbing in the coming months.
As CNF recently reported, the network continues to enjoy massive adoption. Last week, TikTok announced the integration of NFTs through Immutable on the Ethereum network. With more than 1 billion users on the social media network, this could be a major adoption boost for Ethereum and consequently its native token ETH.
The Ethereum team has also recently confirmed the next upgrade, Altair, taking place later this month. The upgrade will in part advance the “punitive parameters” to ensure economic security.
The market is continually volatile and there is no guarantee that ETH will continue upwards. As much as a piece of positive news can send prices rising, negative news could trigger a plummet.