Cryptonews Price Analysis

Models Show Ethereum Promise Even After This Weeks 12% Decline

Cryptocurrency

Ethereum

Crypto Writer

Arslan Butt

Crypto Writer

Arslan Butt

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Arslan Butt is an experienced webinar speaker, market analyst, and content writer specializing in crypto, forex, and commodities. He provides expert insights, trading strategies, and in-depth analysis...

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Last updated:

December 22, 2024

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.

Solana Beats Ethereum – Is a $500 SOL Price Now Within Reach?

Ethereum’s recent 12% drop has not shaken analysts’ confidence in its long-term potential. Currently trading at $3,38, Ethereum has shown resilience amidst market volatility, supported by trading volumes of $28.68 billion.

Despite short-term bearish sentiment, two key models—the Block Subsidy Model and the Mayer Multiple—indicate that Ethereum could still achieve significant growth in this cycle, with price targets ranging from $7,200 to $11,433.

Block Subsidy Model Highlights $11,433 Target

The Block Subsidy Model evaluates Ethereum’s value relative to its thermocap, or the cost of production. Previous cycles revealed Ethereum’s highs reached multiples of its thermocap—64x in its first cycle and 32x in the second.

If this diminishing returns trend continues, the current cycle’s peak is projected at 16x the thermocap.

Ethereum Block Subsidy | Credit: Valdrin Tahiri/Glassnode

Currently trading between the 8x and 16x thermocap multiples, Ethereum has historically initiated its steepest growth phase upon breaking above the 8x level.

Analysts calculate this level at $5,716, while the 16x multiple sits at $11,433. This model suggests Ethereum has ample room to grow, with the likelihood of setting new all-time highs during this cycle.

Mayer Multiple Indicates Expansion Phase

The Mayer Multiple tracks Ethereum’s price against its 200-day moving average (MA), using multipliers to identify overbought or oversold conditions. Previous cycles saw Ethereum’s peaks above the 2.4x multiplier and lows below the 0.8x multiplier.

Ethereum Mayer Multiple | Credit: Glassnode

ETH has already tested the 0.8x level twice during this cycle—in June 2022 and September 2024—mirroring patterns from previous cycles. The current 2.4x multiplier, set at $7,200, acts as a significant milestone. Should Ethereum follow historical trends, this level will serve as a benchmark for a new all-time high.

Ethereum (ETH/USD) Short-Term Technical Outlook

While long-term growth indicators remain positive, Ethereum’s short-term outlook faces hurdles. A persistent downward trendline is capping bullish momentum near $3,400.

This trendline intersects with a supply zone at $3,500 to $3,555, previously a support level but now acting as resistance.

Ethereum Price Chart – Source: Tradingview

Immediate support lies at $3,252, with additional levels at $3,097 and $2,940. Breaking above $3,555 could trigger bullish momentum, while a failure to breach this level might lead to further consolidation or declines. The RSI stands at 41, signaling a neutral-to-bearish sentiment.

Key Insights:

Resistance Levels: $3,555 supply zone and downward trendline limit immediate upside potential.
Support Levels: Key support at $3,252, with further safety nets at $3,097 and $2,940.
Long-Term Outlook: Models project Ethereum’s peak between $7,200 and $11,433.

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.