Is Ethereum (ETH) Hitting Its First “Mainstream Bear Market”?
Is ether (ETH), the gas of the Ethereum network, in a long bearish accumulation zone ahead of a considerable breakout, like the bitcoin price experienced from 2014 to 2017? One cryptoeconomy mainstay seems to think so.
Chris Burniske, a partner at cryptocurrency-centric venture capital firm Placeholder said this week that ether appeared to be in the throes of its “1st mainstream bear market, just as BTC did in 2014/2015.”
From the market’s top in 2014 to the market’s bottom in 2015, the bitcoin price dropped from near $1,000 USD to $200. That 80 percent decrease preceded the cryptocurrency’s eventual march to $20,000 in late 2017.
In his new comments, Burniske argued that specific bitcoin bear market was “the best risk/reward period for investors to get BTC exposure” and suggested ether may now be in the middle of such a period.
2/ To objective observers, the network’s momentum was clear despite the bearish price action; those pre-disposed to dislike based on perceived vested interests, were blinded by biases & missed the bus.
What happened to $BTC then is happening to $ETH now.#StackSats, #EarnETH
— Chris Burniske (@cburniske) August 20, 2019
“To objective observers, the network’s momentum was clear despite the bearish price action; those pre-disposed to dislike based on perceived vested interests, were blinded by biases & missed the bus,” Burniske said.
The takeway? The investor thinks ether has clear momentum that is being missed by many others, even as proponents believe in the cryptocurrency as much as ever.
Of course, if Burniske’s projection doesn’t pan out and the ether price remains bearish for years to come, it would be far from the first time a cryptoeconomy analyst got a forecast wrong. But Burniske isn’t known for spewing such chatter willy nilly — he has a conviction that some are missing what’s right in front of them, like many missed bitcoin in 2015. Whether that projection will actually play out remains to be seen, though.
Latest Bullish Run Over For Now?
Burniske’s “1st mainstream bear market” comments come as an attempt to extrapolate where ether is going from where bitcoin once went.
If we look instead at where ether has been the past few months and where it’s at now, then it appears like ether’s recent bullish trajectory is losing steam — at least for the time being.
ETH bottomed near $83 in December 2018, but after a few months passed bullish buy pressure pushed the cryptocurrency on a run up to more than $360 each this summer. As autumn nears, that buy pressure may have cooled off for now.
For example, consider how the ether price closed last week under $200. That’s the first time that dynamic has occurred since May. In other words, bullish investors may be acutely exhausted in the current cryptoeconomy cycle and bearish trends could be in store for the foreseeable future.
Or not. Maybe Bakkt’s coming arrival kicks off another cryptoeconomy run and crypto bulls live to fight another day. No one knows for sure until it’s all behind us.
What Could Ethereum Become?
Ethereum is angling toward becoming the reserve asset in its own “money lego” economy, as Mythos Capital founder Ryan Sean Adams suggested in a recent edition of The Defiant newsletter:
“Ethereum culture shuns price talk. Build, don’t shill is the mantra. While this ethos has served the community in many ways, it’s also caused us to undervalue and misunderstand the asset that makes Ethereum possible.
[…] ETH has utility, but it’s not just a utility coin. ETH will be used for staking, but not just a staking token. Ethereum is an emerging economy. And ETH is the reserve asset of that economy.”
Ethereum is a non-sovereign economy
To buy bonds to secure this economy you stake ETH
To pay tax in this economy you use ETH
To invest in this economy you hold ETH
For everyday money in this economy you use DAI-backed ETH
ETH is the reserve asset of a new global economy
— Ryan Sean Adams (@RyanSAdams) August 6, 2019
As Adams argued in later tweet, assets used on Ethereum will be a “future revenue source” for Ethereum’s coming proof-of-stake validators. He pointed to the example of Tether, which has now paid more than 1,000 ether over the last month to run its ERC-20 USDT stablecoin on Ethereum.
Every asset on Ethereum is a future revenue source for ETH stakers
Tether paid 993 ETH over the last 30 days pic.twitter.com/ktAVU5OW2w
— Ryan Sean Adams (@RyanSAdams) August 20, 2019
Those fees will be going to stakers before long. The genesis block of the “Ethereum 2.0” network seems primed to launch in 2020.
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William M. Peaster, Khareem Sudlow