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Popular crypto analyst Nicholas Merten says Ethereum (ETH) has a solid shot at rallies in the coming months as the top smart contract platform approaches its highly anticipated transition to proof of stake.
In a new video update, the host of DataDash addresses a recent prediction from BitMEX founder Arthur Hayes forecasting an ETH rally to $5,000 on the back of a successful transition to proof-of-stake, plus a reversal on monetary tightening from the Federal Reserve.
Merten says a 180-degree turn from the Fed anytime soon is likely overly optimistic, but a slow down in interest rate hikes is on the table.
While Ethereum has seen big bear market rallies in the past, Merten says that $5,000 ETH still seems like a long shot.
“All the while I do expect the Fed will pivot, and even though I expect that there’s very good chance that in September, Ethereum will finally actually deliver, and I see that reflect in price action, I think people are getting degree in confidence now. Considering those things, I don’t see us going all the way up to $5,000. Not only would this just be absolutely foreign to what we had in previous bear markets, but on top of that as well, I just want to go ahead and put things in context.
Since the lows here, we’ve already come up about 102% in price. If we take a look at previous bear market rallies, we’ve had 140% returns off of the absolute lows in the preceding months [in 2018]. We’ve come up 360% [in 2019] . All of these are great rallies to keep in mind. And yes, some could argue that ‘Hey, this would be a 472% rally, not too far off from those bear market lows, but it’s important to understand that we have not pulled back anywhere near this bear market back here in 2018.”
The analyst gives an upside target of $2,300, or about 35% above current prices.
“I think the realistic scenario here that we should keep in mind is somewhere between [$3,150] and this $1,700… That means we’re calling for probably a $2,200 price tag on Ethereum. While that’s phenomenal, to get something in this range between $2,200 to $2,300, I think it’s going to happen in a much shorter timeframe.”