Coinbase acknowledges Ethereum’s potential for growth despite trailing behind Bitcoin
In a recent research report, Coinbase analysts have expressed their positive outlook on Ethereum (ETH), despite its lag behind Bitcoin this year. The analysts believe that ETH holds strong long-term potential and could surprise investors with its upside. Although ETH has appreciated by 29% year-to-date, it falls short of Bitcoin’s 50% surge over the same period. However, this performance is in line with the overall market trend. Coinbase analyst David Han suggests that ETH may surprise to the upside in the coming months due to the absence of significant supply-side pressures.
The report highlights several factors that support the growth of Ethereum. Firstly, the implementation of staking and the expansion of layer 2 solutions have reduced the liquid supply of ETH. Han notes that these mechanisms have proven to be meaningful and growing sinks of ETH liquidity, potentially driving up its price. Secondly, Ethereum’s position as the cornerstone of the decentralized finance (DeFi) ecosystem remains secure. The widespread adoption of the Ethereum Virtual Machine (EVM) and innovations in layer 2 solutions contribute to its fundamental strength.
The possibility of U.S. spot ETH exchange-traded funds (ETFs) is another crucial factor that could significantly boost ETH prices. Coinbase suggests that the market may be underestimating the likelihood and timing of ETF approvals. The report states that litigation could reverse initial rejections and further drive speculative interest and investment in ETH.
Technical analysts have also identified bullish patterns that support a positive outlook for Ethereum. A completed Bullish Cypher pattern and a bounce off the key 38.2% Fibonacci retracement support level around $2800 indicate a potential upward movement for ETH. Furthermore, Ethereum’s previous spike above $4000 is seen as a major turning point, signaling the beginning of a new long-term uptrend.
Many well-known cryptocurrency analysts have expressed bullish sentiment for Ethereum. CryptoYoddha predicts that ETH could surge past $10,000 by the end of 2024, citing favorable on-chain supply dynamics and strong DeFi fundamentals. Michaël van de Poppe anticipates significantly higher prices in the coming weeks, suggesting that ETH is in the final stage of its corrective phase.
Overall, the positive projections for Ethereum are based on its strong fundamentals and technical position. The combination of reduced supply-side pressures, continued DeFi dominance, and potential ETF catalysts create a favorable environment for Ethereum’s growth.