"When others are greedy, I am fearful; when others are fearful, I am greedy"$
Preface
Recently, Bitcoin has been on a tear, breaking through an astonishing $95,000, while ETH’s performance has been particularly sluggish. Many people have begun to question whether Ethereum is no longer relevant to this bull run, and even believe that its upside potential has been exhausted.
But my view is exactly the opposite: ETH is currently in a golden window for investment. Not only because it has proven its technical strength and market position, but also because from the perspective of historical laws and market trends, ETH may usher in two waves of substantial increases in 2025.
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1. The value and market logic of ETH
1. Technical value: Ethereum’s position is unshakable
Ethereum is not only the world's largest smart contract platform, but also the core infrastructure of DeFi, NFT and Layer2. In this bull market, Bitcoin's performance more reflects the attributes of "digital gold", while ETH has assumed the role of "economic engine" in the crypto world. Its downturn is more due to short-term market sentiment rather than the loss of technical value.
2. Market logic: Why did ETH perform mediocrely in the early stages of the bull market?
In the early stages of a bull market, funds tend to flow into Bitcoin because it is a bellwether of the market and has strong risk-averse properties. When Bitcoin's gains peak and the market begins to seek higher returns, ETH usually becomes the preferred target.
Looking back at history:
In the 2020-2021 bull market, ETH's two sharp rises occurred during the volatile period after Bitcoin surged.
Before each major upgrade of Ethereum, there is a clear expectation of a pull-up in the market. For example, before the "merger" in September 2022, ETH doubled from its low point.
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2. Key nodes for the future surge in ETH
According to my analysis, ETH will see two waves of growth in 2025:
1. The first rise: the oscillation period after Bitcoin surges in 2025
The current market sentiment is focused on Bitcoin, but this strong rise cannot continue indefinitely. When Bitcoin's momentum is exhausted, the market will gradually turn its attention to ETH. This is not only the natural flow of funds, but also the starting point for the release of ETH's market potential.
Why 2025?
It is expected that Bitcoin may enter a volatile phase in the first quarter of 2025. At this time, ETH will attract capital inflows with its relatively low valuation and higher profit expectations.
The maturity and scalability upgrade of Layer2 technology will further enhance the usage efficiency and value support of Ethereum.
2. The second pull-up: before the upgrade in the first quarter of 2025
Ethereum's technical roadmap is clear, and a major upgrade in 2028 (or ETH 3.0) is the core event that the entire market is paying attention to. This will involve deeper performance optimization and ecological expansion of Ethereum, and the market expects that the price will rise significantly in advance.
Combined with historical rules, we can see that before each major upgrade of Ethereum, there will be an expectation-driven market. For example:
Before the activation of EIP-1559 in 2021, ETH rose from $1,700 to $4,000;
Before the 2022 “merger,” ETH rose from $1,000 to $2,000.
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3. Why is now the best time to buy ETH?
The current downturn in ETH is a great window to enter the market. This low valuation is not due to the decline of technology or ecology, but a temporary mismatch of market sentiment. Here are several reasons:
1. Accumulation of technology and ecology
Layer2 technology is becoming increasingly mature, and ecosystems such as Arbitrum and Optimism are expanding rapidly, which will bring higher transaction demand and fee income to Ethereum.
Ethereum staking has become an important source of income. More than 27% of ETH has been staked, reducing the circulating supply in the market.
2. The valuation is low based on the data
The current market value of ETH relative to Bitcoin's market value ratio (MVRV) is lower than the historical average, which shows that ETH is seriously undervalued. Once the market sentiment turns, this underestimation will be quickly corrected.
3. Ethereum’s scarcity is emerging
After the implementation of EIP-1559, Ethereum's destruction mechanism came into effect. Data shows that since 2022, Ethereum's inflation rate has been close to zero, and even negative inflation has occurred at some times. This means that over time, there will be less and less ETH circulating in the market.
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4. My investment advice
For long-term investors, now is a good time to invest in ETH. From a fundamental and technical perspective, ETH is still one of the core assets in the crypto market. According to my strategy:
It is expected that during the Bitcoin shock period in 2025, ETH will rebound quickly and challenge this target.
Medium to long-term target price: $7,000 - $8,000
Anticipation of Ethereum upgrades before 2025 will further drive prices.
I suggest that you build positions in batches to avoid high costs caused by buying all at once. At the same time, you should also be patient enough to wait for the change in market sentiment.
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at last
The story of ETH is far from over. Undervalued in the bull market, it is accumulating strength for future explosion. If you are a long-term investor, now is the best time to get started. In the future, when the market begins to reflect on this downturn, you will be glad for your decisive decision.
Remember: real investment opportunities often exist in overlooked places.
$ETH It's only 3100 now, hold on!
See you for $8000, Reese!
Student Ou Peng
November 21, 2024
