Key Ethereum Takeaways
- Ethereum outperformed Bitcoin by more than 5X in 2021.
- The trend is set to continue further as investors buy more ETH lured by Ethereum’s ever-expanding ecosystem.
- ETH looks to breakout against Bitcoin and tap $7,500 and higher prices against the US Dollar moving into 2022.
JAIPUR (Coinchapter.com) – Ethereum adoption soared exponentially in 2021. Going into 2022, the outlook for its native blockchain asset, Ether, screams bullish, according to analysts and market observers. ETH looks primed to break out against Bitcoin. And attain a five-figure price against the dollar due to the rising demand of both the coin and the platform.
“The attraction is its open-source public blockchain that facilitates an ecosystem with an endless number of use cases and digital applications. Indeed, everything from decentralized finance “DeFi”, to non-fungible-tokens “NFTs”, and several high-profile alt-coins like Shiba Inu (SHIB-USD) all exist within the Ethereum platform.
observed financial maret research firm BOOX Research
Related: Ethereum eyes $20K as ETH fundamentals and technical setups flip bullish
Ethereum Bullish Outlook: Technical Aspect
ETH Breakout Against BTC Programmed
In their detailed Ethereum market analysis, BOOX Research analysts highlighted Ether’s breakout tendency against Bitcoin. After following A NEARLY FLAT TRAJECTORY SINCE THE LAST 3 YEARS, ETH soared up 64% from 0.03 to 0.083 against BTC, owing to extensive buying pressure during April 2021.
Despite recent price setbacks, Ether maintained its bullish stance against the apex cryptocurrency. An Ascending Triangle setup formation further strengthened that upside bias. The ETH/BTC pair’s 64% upward move formed the flagpole of the technical formation.
BOOX Research analysts expect the pair to explode beyond the triangle’s upper trendline soon. The resulting rally would push the second-largest cryptocurrency close to a $7,000 price.
“In other words, with an expectation that ETH continues to outperform, the exchange rate has room to appreciate higher. In early 2018, the ratio briefly traded as high as 0.12 which would imply a price of $6,900 for ETH assuming BTC remains flat.”
Ethereum advocates and community members too shared the viewpoint regarding ETH’s bullish breakout potential against BTC.
“ETH/BTC has just set a new high for the first time in 2.5 years
ETH historically goes up vs BTC in bull markets, down in bears.
I think ETH setting new highs is a strong signal of bullish continuation for the broader market at large.
We ain’t seen nothin yet.”
said Bankless founder David Hoffman
Ether Looks Bullish On The Daily Chart As Well
The bullish narrative translates equally on the ETH/USD chart, with analysts at the market analysis firm calling for a close above $5,000 in the near term. Moving into 2022, the pair could also surge to $7,500, as can be seen from the chart below. However, the exchange rate between Ether and Bitcoin will be an important factor worth tracking, the BOOX Research fellas asserted.
“To the upside, a move above $5,000 can make way for a run towards $7,500 as our 2022 price target for ETH. Depending on where Bitcoin is trading, the exchange rate between the two cryptos is an important monitoring point with an expectation that ETH outperforms going forward.”
Related: Ethereum analyst sees ETH at $10K by the end of the bull cycle — here’s why?
But BOOX Research analysts also highlighted that ETH’s bullish stance would remain true as long as the alpha altcoin remains buoyed over $4,000.
ETH Bullish Outlook: Fundamental Aspect
dApp And NFTs
Ethereum’s dApp ecosystem is the fundamental reason the blockchain commands a high market value and will continue to do so, BOOX Research analysts noted. Bitcoin may have the early creation advantage, but Ethereum’s programmability distinguishes it from the flagship crypto asset.
“The key difference between Ethereum and Bitcoin is the concept that its blockchain is programmable allowing developers to create applications (dApps) that are stored and run on the network. The innovation from Bitcoin back in 2009 was the structure of public ledger cryptography while Ethereum was created to improve on the concept.”
Related: NFT beats Crypto to become Collins Dictionary’s Word of the Year
NFTs predominantly elevated Ethereum’s relevance in 2021. BOOX Research folks mentioned how the non-fungible token trend seeped deep into finance and pop culture. The concept could also extend to tokenization of real-world physical objects such as land and real estate soon. Overall, the use case of NFTs and their implications are far-reaching and radical.
“Beyond the simple graphic-based artwork being traded as collectibles, there is an expectation that the concept is expanded into the tokenization of physical items including real estate. Several companies are moving forward with these types of projects.”
Diminishing Supply And Proof-of-Stake
Also, BOOX Research executives pointed out how the recent blockchain upgrades rendered Ethereum a disinflationary platform. For example, the ETH burn feature introduced by the London Hard Fork implied that EIP-1559 would remove a portion of ETH tokens from the total circulation forever.
That would, in turn, spur demand against falling supply. ETH prices would continue to climb upward as a result.
“…there is an expectation that the total supply of Ethereum may begin to shrink at a pace of about 2% per year as more Ethereum is burned than created with each new block reward. As a result, this marginally deflationary effect can work to add scarcity and support higher prices over time.”
Plus, Ethereum’s transition from a Proof-of-Work (PoW) consensus mechanism to Proof-of-Stake (PoS) will elevate the blockchain’s “green image”. That in turn would make ETH a viable “ESG friendly” asset, which would increase its appeal amongst investors moving into 2022.
