We've been hearing this question a lot lately. Given the pervasive FUD, and anticlimactic rallies, it is reasonable to question the overall long term outlook for Ethereum, and cryptos in general. We don't have a crystal ball, but can only refer to historical examples, noting that crypto does tend to move in cycles and history has repeated itself in 2012, 2017 and now here in present day.
Let us consider what happened in 2018, when Bitcoin crashed from highs at around $18K to $6K in just a few days. That comparative decline in Ethereum is displayed on the left hand side of the daily chart. Notice that the comparative high for Ethereum was about $1600. Our Fibonacci levels, give us good indications of the steps along the way down for ETH to reach lows. Observe that we hit the 0.236 Fibonacci level at $378, indicated by the red circle.
Fast forward to present day. It is difficult to ignore the similarities: "when in doubt, zoom out". We have comparative tests of 0.618, then 0.500 in both cases. But the low point was the 0.236 level, also highlighted with a red circle. This puts us at about $1100 even, which is a strong technical and psychological level. It's far from current levels, and seems unreasonable. But then again, the $300's also seemed unreasonable in 2018.
The point of this analysis is certainly not to inspire FUD or encourage a particular trading decision. We're just analyzing some worst case scenarios based on historical evidence.
Let us consider what happened in 2018, when Bitcoin crashed from highs at around $18K to $6K in just a few days. That comparative decline in Ethereum is displayed on the left hand side of the daily chart. Notice that the comparative high for Ethereum was about $1600. Our Fibonacci levels, give us good indications of the steps along the way down for ETH to reach lows. Observe that we hit the 0.236 Fibonacci level at $378, indicated by the red circle.
Fast forward to present day. It is difficult to ignore the similarities: "when in doubt, zoom out". We have comparative tests of 0.618, then 0.500 in both cases. But the low point was the 0.236 level, also highlighted with a red circle. This puts us at about $1100 even, which is a strong technical and psychological level. It's far from current levels, and seems unreasonable. But then again, the $300's also seemed unreasonable in 2018.
The point of this analysis is certainly not to inspire FUD or encourage a particular trading decision. We're just analyzing some worst case scenarios based on historical evidence.
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