Ethereum price could soar to $5,000 this Thanksgiving weekend
Ethereum price has been in a tight range in the past few weeks as investors reflect on the coin’s spectacular rally. It is trading at $4,290, which is slightly below its all-time high of $,4868. This drop has pulled its total market capitalization to more than $500 billion.
There are several reasons why Ethereum price has pulled back in the past few weeks. First, investors are afraid about the rising competition. Recently, we have seen many Ethereum-killers attract capital and interest among developers and investors.
For example, Avalanche has grown to become the 11th biggest cryptocurrency in the world. Similarly, Ethereum-killers like Solana, Tron, and Terra have seen remarkable growth in the past few months.
At the same time, layer-2 blockchain platforms like Polygon have also grown. Therefore, there are concerns that many developers will switch to these platforms.
Still, while Ethereum has its weaknesses, it has a strong market share that will be difficult to dethrone. For example, it is now used to build some of the biggest projects like Shiba Inu and Decentraland. Also, it dominates the DeFi industry.
It has more than 300 DeFi projects that have a total value locked (TVL) of more than $173. The Binance Smart Chain, which is the second platform, has 177 DeFi platforms that have a TVL of less than $20 billion.
Meanwhile, Ethereum is also working to improve its platform. Developers have already introduced burning and are in advanced stages to transition to layer 2.
Ethereum price has also crashed because of psychological reasons. For one, it declined as it approached the key resistance at $5,000. Similarly, it declined when Bitcoin approached $70,000. Historically, we always see a pullback whenever it approaches a key level.
Ethereum price prediction
The daily chart shows that Ethereum price has struggled to find direction in the past few days. At the current level, Ethereum is is slightly above the ascending trendline shown in red.
The price is also oscillating around the 25-day and 50-day moving averages while the width of the Bollinger Bands has narrowed. Most importantly, the Average True Range (ATR), which is a good measure of volatility has declined.
Therefore, in my view, I suspect that ETH price is having a calm before the storm. This means that it will likely maintain a bullish trend and soar above $5,000 during or after the Thanksgiving weekend.