The crypto party started as corporate earnings-induced optimism and hopes of a Fed thawing perked up risk appetite in the financial markets. Ethereum ETH/USD, the second most widely traded crypto, could be in for a strong run up in the near term, according to economist Raoul Pal.
What Happened: The Ethereum chart looks constructive, Pal said, supporting his deduction with technical formations on the chart.
Highlighting three technical trends that could prove bullish for the crypto, Pal noted that the crypto has broken a downtrend from late November 2021. The chart also showed an "inverse head and shoulders" formation, he noted. This formation when appearing in a downtrend is indicative of a bullish reversal.
“The bigger picture would be the cup and handle formation at 2,000, eventually,” he added. A cup with a handle is technically a bullish continuation pattern that marks a consolidation period followed by a breakout.
Potential Returns: Ethereum peaked at $4,891.70 on Nov. 16, but began to unravel thereafter amid the crypto market downturn. The new year did not bring any respite as it continued to trend lower before bottoming at $896.11 on June 18, a peak-trough drop of about 82%. It has been consolidating in a broad range since then.
ETH was expected to bounce big with The Merge that occurred in mid-September, which saw the blockchain move from proof-of-work to proof-of-stake. The crypto never took off after this landmark event, as market-wide risk aversion kept sentiment subdued.
Investing $1,000 in Ethereum at Friday’s closing price of $1,646.78 would theoretically fetch 0.61 of the crypto. If the all-time high is revisited, this would be worth $2,983.937, a gain of about 200%. At last check, Ethereum was gaining 3.74% at $1,647.17, according to Benzinga Pro data.
Read Next: Cryptocurrency predications
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