Ethereum (ETH-USD) continues to be a volatile crypto investment. Crypto is volatile by nature — I’m not setting it apart from the asset class. It has clear catalysts as well as multiple headwinds. Consequently, investing in Ethereum is often a flip of a coin.
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Investors attempt to put together a few salient reasons why it should move one way or the other. But crypto is volatile and predicting its movement is difficult. Sometimes that means you try to find patterns where they may or may not exist.
That’s why pricing patterns are one place to look which indicate that ETH may continue to rise. In other words, technical trading.
Ethereum on the Rise
In 2021 there was a clear trend in relation to Ethereum prices — two clear trends, to be more precise. What I mean is that there were two distinct periods during which Ethereum showed similar price behavior.
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The first occurred when ETH showed resistance at price levels just below $2,000 in February and March. Prices broke through those resistance levels and rose to nearly $4,400 by May. Then they dropped down to $2,000 by July only to rise to nearly $4,900 by November.
Thus, a pattern has begun to emerge within Ethereum prices in which it rises by a few thousand dollars only to give it back. That repeats, and something of a predictable bottom looks to have formed.
If that pattern holds true, now would be a chance to catch it on the rise. ETH hit a low of $2,200 in late January. It has rebounded since, briefly rising above $3,100 — it now sits slightly below that threshold. It is an inexact science, but that pattern does appear to be bearing out again.
I’m not much of a proponent of technical stock analysis because it relies on finding patterns in pricing so heavily. For the same reason, I don’t think it’s particularly useful for crypto. That said, in these early days of crypto analysis there aren’t many reliable tools for prognostication.
That said, my opinion is far from the end all, be all. Bullish speculators have offered a variety of price targets that Ethereum could rise to.
There’s other positive news that extends beyond speculation around price movement for Ethereum.
Those price increases directly correlate to an increasing market capitalization for Ethereum as well.
Ethereum is now the No. 28 most valuable asset ranked by market capitalization with a current value of $368 billion. That places it just behind Walmart (NYSE:WMT) at $370 billion.
That’s a very interesting way of thinking about Ethereum. While I have my own trepidation about cryptocurrency overall and where Ethereum fits as competitors like Solana (SOL-USD) and Cardano (ADA-USD) seek to dethrone it, the market differs. The market has spoken with its capital. The message is loud and clear: Ethereum is one of the most important assets in existence.
What to Do With Ethereum
I remain on the fence when it comes to Ethereum’s long term place in the cryptocurrency landscape. Its gas fees continue to cause real problems. The door seems to be opening wider for its competitors the more time passes.
But in the short term ETH looks to be rising. The market signals are there. Given that cryptocurrency is even more fickle than stocks when it comes to riding the highs and avoiding the lows, now may be the time to jump in. It seems that some sort of identifiable pattern has emerged in terms of price. That’s as real as anything else when understanding crypto swings.
Ethereum is transitioning during 2022. 2021 was full of ups and downs. But if its developers successfully implement proof-of-stake this year, its chances to stabilize become much better.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.
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