Ethereum bull market target is $4K-5K, Bloomberg analyst asserts

Key takeaways:

• Smart contract platform Ethereum’s native token Ether (ETH) looks poised for more gains, according to the Bloomberg Crypto Outlook report.
• Ethereum’s supply squeeze could pump the price.
• The Bull Market Cage is at $4,000-$5,000, says the Outlook.

YEREVAN (CoinChapter.com) – Mike McGlone, senior commodity strategist at Bloomberg, published the December edition of Bloomberg Crypto Outlook 2021. The report analyzed the prospects of Ethereum, the world’s leading smart contracts platform by volume and users, this month and predicted its price trajectory for Q1/2022.

Mr. McGlone pointed out that the alpha altcoin is a finance and money digitalization epicenter. The expert added that its unique position on the crypto market would be the “foundation for further price appreciation.”

Ethereum has been a top-performing major crypto asset in 2021, and we expect that to continue after a drawdown of about 60% in 1H.

specified the report.

Bloomberg Crypto Outlook asserted that Ethereum will enter 2022 with growing adoption and substantial supply shortage. In detail, after Ethereum implemented its protocol improvement EIP-1559, the network has been burning ETH with each transaction. The burn rate stood at 5.40 ETH/min, as the smart contract platform burnt over a million tokens since August, worth $5 billion in total.

The report reviewed the critical role of the supply squeeze for ETH price. Mr. McGLone specified that for the first time in 52 weeks, the ratio between new Ethereum coins vs. the total outstanding is on track to drop below 4%.

Also read: Ethereum bulls HODL while ETH packs 6%

Plenty can go wrong with upgrades to new technology, but we see maturation with an enduring downward slope in incremental supply that — if the rules of economics apply — are price positive for Ethereum.

said the executive.

What about the Ethereum price?

Bloomberg analyst asserted that Ethereum price is “running about parallel with the total market cap of crypto assets.” As most DeFi activity revolves around the second-largest cryptocurrency, it has chances to win the DeFi race, despite numerous “Ethereum killers.”

Mr. McGlone pinpointed the $4,000 level as a crucial milestone for Ether. He specified that the cryptocurrency flipped the $4,000 level from resistance to support and faces $5,000 as the next psychological resistance level.

The graph above clearly shows an Ascending Channel, that features two parallel trendlines driving the price higher. Within the Channel, the $4,000-$5,000 interval constricted the price action for over six weeks. Moreover, ETH could fall back before attempting to retest the resistance again. But the report was bullish on the alpha altcoin’s “expanding ecosystem.”

Also read: Ethereum's bull flag setup fights two dreaded selloff indicators as ETH rises back above $4.4K.

As of publication, ETH/USD exchange rate stood at $4,348 ahead of the London session opening bell.