Ethereum's price may fall into extended consolidation after it failed to follow Bitcoin's breakout out of the Fear of Missing Out pattern, as shown in the chart below.
Consolidation periods are natural after strong momentum and during times of indecision; they also give investors opportunities to accumulate more assets at lower prices before the next breakout or drop occurs.
If you've been following Ethereum's price movement in the past several months, you've probably noticed that it has been on an overall downward trend.
While there have been some very significant corrections during this period, the downward trend seems to be continuing over the past few weeks and months.
While this can be discouraging to anyone who has invested into Ethereum at a higher price point, it also presents an interesting opportunity to get in at a lower price point while it may still appear to be in consolidation.
Why is this different from other cryptocurrencies?
Ethereum is different from other cryptocurrencies for a variety of reasons.
First, it has a much more active development community than most other coins. Second, it has a unique blockchain that allows for smart contracts and decentralized applications.
Third, it has a strong foundation with a large number of supporting businesses and organizations.
Fourth, it has a relatively stable price compared to other cryptocurrencies. Fifth, it has a strong brand and reputation. Sixth, it is one of the few coins that is actually used in real-world applications.
Seventh, its price is not as susceptible to manipulation as other coins. Eighth, it has a limited supply which will make any upward movement amplified by low volume trades.
Ninth, the gas limit has been increased three times since 2017 to allow for quicker transaction times and lower fees (and may be increased again).
Tenth, the protocol offers rewards to miners through mining pools who provide reliable computing power to support transactions on the network. Eleventh, unlike Bitcoin or Litecoin which are only ASIC-resistant (meaning they can't be mined with an application specific integrated circuit), Ethereum is designed such that ASICs are prohibited altogether so that anyone can mine on their personal computer without expensive hardware or technical knowledge needed.
What should we expect in the near future?
We could see Ethereum's price fall into extended consolidation in the near future.
The reason for this is that the market has been bearish for some time, and there is no clear catalyst on the horizon that could trigger a sustained move higher.
That said, we could see some choppy price action in the coming days and weeks as traders jockey for position.
So, if you're thinking about entering into a trade, be sure to use proper risk management techniques. If you have an established position, make sure that your stop-loss order is close enough to limit your losses. And if you don't have an established position,
it may be best to wait for a more reliable signal before making any trades. There are many fundamental factors that are leading people to believe that the prices of cryptocurrencies will continue their downward trend. One of these factors is the overwhelming fear of regulatory crackdowns on trading platforms by governments around the world.
Investors can be spooked out of the markets by news like this, which leads them to sell off their investments and take their money elsewhere.
Another factor behind negative sentiment driving down cryptocurrency prices is high-profile hacks that lead investors to question whether they want to invest at all. There have been over 100 thefts or attempted thefts from exchanges so far in 2018 alone, with hackers getting away with billions of dollars worth of crypto coins because so many centralized exchanges offer lax security measures or none at all.
Is there a more promising long-term project than this one?
Many investors are wondering if Ethereum is still a good long-term investment.
The price of Ethereum has been on a roller coaster ride over the past year, and it's currently in a period of consolidation.
While the future is impossible to predict, there are some factors that suggest that Ethereum may enter into an extended period of consolidation.
First, many cryptocurrency projects have soared in recent months.
Ethereum is up from $5 billion to $9 billion this year alone, but this doesn't even make it one of the top 10 cryptocurrencies by market cap (Bitcoin dominates). Second, new blockchain protocols such as Casper and Sharding have not yet been tested for scalability issues.
It will take time for these developments to be released for public use. Finally, there could be a sudden influx of new investors who decide to sell their tokens once they experience their first correction.
With Ethereum entering into an extended period of consolidation, it might be best to wait before investing any more money.
If you do invest, don't invest any money you're not willing to lose because while the future is unpredictable, there are some trends that we can look at when making our decisions.
What should we do now?
While it is impossible to predict the future of the markets with 100% accuracy, we can take a look at the current situation and make an educated guess as to what may happen next.
Ethereum's price has been on a roller coaster ride over the past few months, and it appears that it may fall into extended consolidation.
Here's why
1) The market has consolidated for about six weeks now.
2)The bears have become emboldened by this extended period of stability.
3) Ethereum looks poised to enter another long-term bearish cycle following its previous bull run from March 2015-November 2016, which saw ETH appreciate more than 20x in value during that time fram.
4)Several bullish signals have been broken recently; namely, the EMAs crossed but they were quickly pushed back down below the black line and their crossover hasn't managed to hold ground since then; additionally, RSI (momentum indicator) broke its upward trendline and stochastic oscillator went negative after having reached 60%.
5)Current accumulation levels are low as seen by lower highs in trading volume .
6) The overall sentiment seems to be very bearish based on the media coverage and general public opinion.
7) Large amounts of money have been flowing out of ICOs like Neo (NEO), Stratis (STRAT), TenXPay (PAY), Lisk(LSK), Monero(XMR), Waves(WAVES).
All of these factors point towards a possible correction or extended period of consolidation before Ethereum moves upwards again.
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