2020 and the Chances of a Rebound for EthereumDecember 24, 2019
As the second-largest cryptocurrency in the world, ethereum is currently in a tough position, along with most – if not all – of the market. This digital currency is still the most promising major crypto network that offers a dynamic and expanding technical capabilities. Still and unsurprisingly this did not shield it against the onslaught of the bear market. So it too participated in the price slashing that took place during the first week of December. While the free fall of the prices stopped, for now, the future potential of the ETH token is still under a big question mark.
Naturally, all of this is being heavily on the minds of most traders and investors in this cryptocurrency. Something very similar could be set for the developers as well being that most are unsure what is the technical elements that could change the fortunes of the network. Yet in spite of the doom and gloom of the current outlook, some are certain that 2020 could be the year of big and positive change for ethereum. Here is a breakdown of that perspective and how could it manifest itself in the real market during the year to come.
ETH is approaching the end of the year in an unfavorable position. Currently, the network is struggling to get the price of its token over the 140 USD mark. At that time, it has also seen drastic drops well beyond that value. All of this shows that the market is drifting further and further away from any bullish predisposition. Those traders who are in the market for the long position are desperately counting on a rebound that would take the price to the 200 USD level or even reach the 300 USD mark.
Yet, the value of 300, the network did reach back in the summer of 2019, now seems incredibly optimistic. Most analysts agree that there is solid support for the current price and backing that would spur on a bull run later in 2020. This might even occur in the first one or two months of the year. But expectations like this are often drastically biased towards hopefulness coming from the traders and even many network developers. The actual situation is much more somber and it also paints a pretty negative picture for the next 12-month period.
Possible Bull Run and Tech of Ethereum
Beyond the current status of the network, there is still a bull run possibility. Historical data shows that this scenario could take place. In fact, there are no technical signs that are stopping ETH from jumping back to its highest point of 2019 or even surpassing them to the 400 USD level. Here once again the potential lies in the tech aspects of the network. This is rarely examined but the need for smart contracts is an ever-growing aspect of the crypto community especially its development side.
In fact, the blockchain community is constantly seeking new solutions in this domain and there is little doubt that smart contracts are the way forward for many blockchain applications. For example, the development of peer-to-peer trading platforms will almost certainly drastically increase in 2020. This and any other technical advantage that the network provides to the market will definitely benefit its price.
Theoretically, they would be able to support any potential bull run. However, there is also an absolute certainty that no technical breakthrough including successful hard forks and big upgrades, can on their own trigger any major price movement. Time has shown this to be true previously and there is little doubt that this setup will continue.
Another aspect of the pieces that ethereum is ending the year in good shape is its community of users. Like in esports or practically any other modern digital venture, the ability to attract and retain users is paramount to any level of success. In 2019 this network had a pretty solid run when it comes to user acquisition and user retention. In that period the network added almost 4 million new active addresses. Overall, including passive accounts, there are 20 million new ones.
The development side of the community is equally active. 2019 saw over 520 new apps on the network appear. The total sum of new and old apps is now at 2700. This means that 2020 will see that number climbed to over 3000 most likely before the summer begins. All this points to a healthy community that is both using and developing the capabilities of the network. This too, just like the technical aspects of the network is strengthening the potential for a major price increase.
While all these positive factors are relevant and through, there is another major point to the same argument. It, however, as everything price-related, is directly tied to the rest of the cryptocurrency market. More precisely, this factor focuses on the bitcoin network and its own price movements. In the past, every single major movement upwards of the ETH token mirrored that of the BTC. While ETH enthusiasts want to believe that the token has its own sea legs, the reality remains quite different.
Traders and investors continue to see this network as a mirroring all the events in the most prominent cryptocurrency on the market. During the previous years, some have predicted that this will change and even open to the possibility of ETC becoming the dominant token. This did not occur. Furthermore, no one is arguing the same point for 2020.
Now, there is a clear consensus that ethereum is basically following anywhere that bitcoin is leading. That on its own is not a cause for concern being that the gravitational pull of the biggest token is so huge that any other token on the market must be caught in it. However, it still once again shows that both adoption and technical merit are not the elements that trigger a bull run. Instead, it is the power of BTC that either does or does not do the same in 2020.