In the past 30 days, Ethereum’s (ETH) price has surged by 33%, fueling speculation about the cryptocurrency’s potential to hit new highs. While it seems unlikely as this month draws to a close, analysts’ Ethereum December prediction could bring in more gains for holders.
BeInCrypto explores these forecasts, uncovering the key drivers behind the bullish sentiment surrounding ETH.
Analyst Bullish on Ethereum, but Give Conditions
According to Juan Pellicer, Senior Researcher at IntoTheBlock, Ethereum’s December prediction could see the cryptocurrency hit a new all-time high. However, in his opinion, Pellicer said that this would only come to pass if ETH could break through $4,000.
Besides that, the researcher mentioned that ETH could closely follow Bitcoin’s performance in this case, indicating that large holders’ accumulation and retail participation could be key to the potential.
“The outlook for Ethereum closely mirrors Bitcoin’s positive trajectory, with significant potential for an end-of-year rally that could gather even more momentum if it successfully breaks through the previous $4,000 ATH. Our on-chain analysis is looking at trends in accumulation by large holders, which would indicate spot buys from both institutional and retail investors,” Pellicer told BeInCrypto.
But as of this writing, Ethereum’s large holders’ netflow has decreased, suggesting that whales are no longer accumulating as much as they were some days back. If this continues, ETH’s price could find it challenging to reach $4,000 next month.
Ethereum Large Holders Netflow. Source: IntoTheBlock
On the other hand, if these holders begin to accumulate again, this might change, and the Ethereum December prediction could end up being bullish.
For Brian Quinlivan, Lead Analyst at Santiment, one key metric to monitor is Ethereum’s funding rate on BitMex and Binance. The funding rate shows if longs (buyers) are dominating shorts (sellers) in the derivatives market.
When it is positive, longs have the upper hand. But if it is negative, shorts do. As of this writing, the funding rates on both exchanges are highly positive. This indicates that longs are dominant, and most traders expect ETH’s price to increase in December.
Ethereum Funding Rate. Source: Santiment
However, Quinlivan believes the metric needs to stay relatively neutral so that Ethereum’s price can catch BTC.
“But with the longs dominating the shorts on these top exchanges, it means that a significant climb here would be overcoming a lot of odds. Historically, we need funding rates to stay neutral or even lean toward shorting in order to justify future major rises,” the analyst told BeInCrypto.
Another analyst who spoke to BeInCrypto about ETH’s potential next month is Julio Moreno, Head of Research at CryptoQuant. Using the Market Value to Realized Value (MVRV) ratio, Moreno says ETH is approaching an undervalued state relative to BTC.
The MVRV ratio is a key metric that shows if an asset is undervalued or overpriced.
Ethereum MVRV Ratio. Source: CryptoQuant
Based on the image above and historical data, Moreno suggests that ETH may soon replicate its price action from February 2020, a period that marked the beginning of its rise to an all-time high in 2021.
“Currently, the relative valuation of ETH against Bitcoin (violet line in the chart) is approaching extreme undervalued territory (green area). The last time that ETH was this undervalued against Bitcoin was back in February 2020.” Moreno said in the conversation with BeInCrypto.
ETH Price Prediction: 4,000 or More on the Table
From a technical perspective, Ethereum has formed a bull flag on the daily chart. The bull flag pattern features a sharp rise, often referred to as the “flagpole,” followed by a tight, rectangular consolidation phase known as the “flag.”
This formation typically indicates an upcoming breakout, during which the price rests and gathers strength before making an upward move. As seen above, ETH’s price has broken out of the consolidation phase.
Ethereum Price Analysis. Source: TradingView
While it has faced resistance around $3,600, it is likely to bounce again. If this happens, Ethereum’s December prediction could see the value rise above $4,000. However, if the cryptocurrency faces selling pressure, the trend might change, and ETH could drop to $3,003.
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