Ethereum price moved sideways on Monday as the cryptocurrencies industry remained under intense pressure. The ETH price is trading at $3,825, which is a few points above the weekend low of $3,635. Its market capitalization is at $454 billion, which is a few points below the all-time high of more than $500 billion.
Ethereum 2021 review
Ethereum had a relatively positive year in 2021. Its price surged by more than 350% and it tested an all-time high of $4,800.
There were several catalysts for this price action. First, Ethereum price rose because of the overall performance of the sector. The total market capitalization of all cryptocurrencies jumped to an all-time high of more than $3 trillion.
Second, the price jumped because of the growth of its ecosystem. For example, the number of decentralized finance (DeFi) platforms built using Ethereum jumped to more than 300. And their total value locked (TVL) rose to more than $150 billion. That was a strong performance for an industry that was barely in existent a few years ago.
Third, Ethereum’s developers continued to create the infrastructure that is needed to transition Ethereum from a proof-of-work to a proof-of-stake network. For example, in the third quarter, they unveiled the London hard fork that led to changes like the concept of burning.
Looking forward, in 2022, there will be two key themes to watch. First, there is the concept of the Federal Reserve. The bank has hinted that it will end its quantitative easing (QE) program in March. It will then implement three rate hikes in 2022. In most cases, assets like Ethereum tend to do well in a period of low interest rates.
The second one will be the transition to ETH 2.0. The developers have already unveiled the testnet for this product ahead of the merge that will happen in the first quarter. Second, investors will watch out for the adoption of the so-called Ethereum-killers.
Ethereum price prediction
The weekly chart shows that the ETH price formed a cup and handle pattern between 2018 and 2021. This pattern is shown in yellow. It managed to move above the upper side of the channel at $1,453 on January 18. It has now formed a handle section.
Another bullish factor is that the price remains above the 25-day and 50-day exponential moving averages (EMA). Therefore, while the Ethereum will likely drift lower for a while, a bullish breakout above $5,000 cannot be ruled out.
If you want to invest in Ethereum, you might be interested in automated cryptocurrency trading robots such as Bitcoin Profit, Bitcoin Revolution and Bitcoin Trader.
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