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Ethereum Price Preview November 30 – December 6

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Last week saw a series of major announcements and developments in the crypto markets, with high volatility for Bitcoin, Ethereum, and other cryptocurrencies. Let’s take a look at the fundamentals underlying Ethereum’s price action, and what to expect in the coming week.

The ETH Bull Market Continues

The price of Ethereum has seen major gains over the last week, peaking at $623.27 on Monday November 24 before crashing to $482.78 and then recovering. Many in the space believe ETH is just getting started.

DTC Capital’s Spencer Noon posted a series of tweets outlining why Ethereum is likely entering a new bull market. Noon cited the fact that active ETH addresses on the network have nearly doubled in the last year, hitting 500,000 last week.

People are now paying more fees on Ethereum than on any other network, a real-world sign of value being exchanged on and attributed to the network. Gas prices and volumes show increased demand for Ethereum. The 20-month low in active supply 2y-3y (the amount of circulating supply last moved between 2 years and 3 years ago) is another clear indicator of growing demand.

Traders are responding to these signals, and the parabolic growth of stablecoins on the network shows an increasing number of traders flocking to Ethereum as the bull run gathers momentum.

Interestingly, DEX volumes have shown major growth recently, with $20 billion in Ethereum volume over the course of 30 days making a total of $86 billion throughout the year, indicating that decentralized exchanges are becoming competitive with their centralized counterparts (although this trend has recently reversed slightly).

All told, the fundamentals in the ETH market are as strong as they’ve ever been, and prices are still well below the ATH seen in 2018, raising the question of whether or not ETH is undervalued.

Eth2 is now primed for a December 1st launch, with anticipation building around the long-awaited milestone.

Facebook Libra Launch Announcement Stirs Up Markets

The announcement that Facebook’s Libra coin is due to launch in January 2021 was major news for crypto investors. Libra was initially proposed as a stablecoin deriving its value from a basket of fiat currencies, allowing Facebook to launch a global stablecoin that spanned multiple financial markets.

Following regulatory backlash, Facebook walked the project back to become a dollar-pegged stablecoin, but may launch more stablecoins for other major fiat currencies (and baskets of these) in the future. Much like PayPal’s integration of digital assets, the Libra announcement is welcomed by many in the space even as it is acknowledged to be a highly centralized initiative.

To many, the huge leap forward in cryptocurrency awareness and adoption that comes with these initiatives is worth the compromise in centralization, and while die-hard crypto supporters are unlikely to use either PayPal or Facebook’s crypto products, they may well benefit from upward price momentum and additional users that some analysts forecast arising from this institutional adoption.

Media Roundup

BlockBali is hosting a DeFi summit with 500 participants in attendance on Monday November 30. The summit will educate attendees on DeFi interoperability and use cases, with speakers from Aave, Polkadot, and the Bitcoin Association among others.

Descubriendo Blockchain (Discovering Blockchain) is hosting a Spanish-language event on Thursday December 3, with multiple sessions giving an overview of blockchain tech as well as Ethereum seminars, stablecoin talks, and talks on crypto wallets and other relevant issues. Mariano Conti, head of smart contracts at MakerDAO, will be one of the speakers, as will Aragon’s Maria Gomez.

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Conor Maloney
Conor Maloney Analyst