Ethereum price has gone had an eventful week. While the ETH price soared to a multi-year high of $1,451 this week, it has pared-back some of those gains. At the time of writing, it is trading at $1,158. It has dropped by more than 10% in the past 24 hours, bringing its market cap to more than $134 billion.
What’s happening: The latest sell-off of Ethereum price is in part due to the overall weakness in the cryptocurrencies industry. In fact, the total market cap of these digital currencies has dropped from more than $1 trillion to the current $902 billion.
This performance is happening mostly because of profit-taking and the rush to the exit by retail traders who have been following the crowd. It is also partly because of the statement by Janet Yellen, the incoming Treasury Secretary who pressed congress to curtail digital currencies. The statement came a week after Christine Lagarde of the ECB argued for the same case.
Ethereum price prediction
The recent price action of Ethereum price was actually easy to predict. Just last week, I wrote that the ETH price would rise to its all-time high because of the cup and handle formation. This is what happened.
Looking at the long-term chart, we see that Ethereum has been in recovery mode since it moved to a low of $83 in 2018. Along the way, it has been forming a pattern that resembles a cup, as shown in the chart below. Therefore, since it has completed the first part, the current weakness is understandable.
Therefore, while this weakness will likely remain for a while, I suspect that the price will ultimately bounce back above its all-time high as bulls aim at $1,500 and above.
However, we should not rule out a situation where the price of Ethereum falls back to $365, which is the highest swing in June 2019.NB: I recently warned that Bitcoin price would drop to about $26,000 using technical analysis. You can read about this forecast here.
ETH price chart