Ethereum as a Contrarian Bet for 2025
Ether (ETH) has faced difficulties in gaining momentum since the beginning of 2024. The chief investment officer of Bitwise Asset Management, Matt Hougan, considers Ethereum to be an underdog going into 2025. Hougan pointed out that Ether has been struggling, especially after hitting a 42-month low against Bitcoin (BTC) on September 16.
Hougan remains optimistic about Ether’s future but acknowledges that its price may remain sluggish for the remainder of the year. He believes the market might reassess Ethereum as we approach the November elections and any resulting regulatory clarity. For now, he sees Ethereum as a potential contrarian bet through the end of the year.
Ethereum’s Struggles and Market Position
While Ethereum has been flat, its biggest competitor, Solana (SOL), has risen 38% year-to-date. However, Solana has also struggled against Bitcoin, with some analysts predicting it will follow Ethereum’s downward trend.
Potential Downside Before 2025
According to a crypto trader named GGG, Ether might experience more downside in the short term. He compared the current market situation to a previous bear market rally followed by a significant drop. Additionally, the launch of the first Ethereum exchange-traded funds in July had little positive impact, with net negative flows and a nearly 30% decline in ETH price since.
If Ether’s price falls further, it could form a triple-bottom pattern, potentially leading to a rally in the fourth quarter of 2024. Crypto Bullet, a popular analyst, noted the similarity between Ether’s 2021 and 2024 charts, suggesting a possible triple-bottom formation.
Key Support Levels and Liquidation Risk
On the 3-day chart, Ether’s price is retesting its 700-day accumulation range, which acts as significant support around $2,200. For Ether to gain more momentum, it needs to stay above this long-term support level. According to CoinGlass data, if Ether’s price falls below $2,200, it could trigger over $1 billion worth of leveraged short liquidations across all exchanges.
Bitcoin’s Influence on Ether’s Momentum
Ether’s price could also gain momentum if Bitcoin starts its parabolic phase of the bull cycle. Some analysts predict a three-month Bitcoin rally to $92,000, which could start in October, based on historical chart patterns and Bitcoin’s average monthly returns for the fourth quarter.
Conclusion
Investing in Ether involves risks, and its price action may remain sluggish in the near term. However, the potential for a rally exists, especially if market conditions change and Bitcoin enters a bullish phase. As always, investors should conduct their research before making any investment decisions.
