Ethereum Price in Q2: 4 Reasons for FOMO and 4 for FUD

In the Northern Hemisphere’s traditional saying, April showers result in May blooms. Can we expect this pattern to continue in the crypto exchange markets during Q2 of 2024 following a significant correction in April?

And if the market does recover in May, whose flowers will bloom brightest?

The price of Bitcoin appears poised for a prolonged uptrend after four years, but which cryptocurrencies – Binance, Solana, Cardano, Aptos, or Ethereum as the leading smart contract coin – will generate the most significant DeFi growth during the second quarter?

Over the past year, Ethereum’s price has increased by nearly 100%. However, in the last month, Ether has experienced a decrease of over 4%. Conversely, during the previous five-day span leading up to Monday, Ethereum prices rose by more than 7%.

In the second quarter of 2024, there are four compelling reasons to consider investing in Ethereum due to the fear of missing out (FOMO), and additionally, four reasons to reconsider your investment if you’re feeling apprehensive, anxious, or uncertain (FUD).

FOMO:

Here’s what Ethereum has going for it after the Bitcoin halving at block height 840,000.

1. Ethereum Price $4,000 Is New Goal

In February, Ethereum dropped below $3,000 for the first time in two years on crypto exchanges. However, it surpassed $4,000 for the first time since then in March. Following a significant decline, Ethereum hovered around $3,200 on Monday without making a decisive move. If the bulls manage to overcome the resistance at this level, the next significant resistance will be around $3,700 – a price point where Ethereum had previously peaked in April.

On November 12, 2021, Ethereum, the world’s second-largest cryptocurrency by market value, reached an unprecedented peak of $4,808.74. Having surpassed the $3,000 mark during the previous quarter, Ethereum enthusiasts now aim for $4,000 and may even target $4,800 by around 2024.

At the end of Q1, a post on the EthTrader forum with over 2.3 million members expressed optimism about Ethereum (ETH): “ETH still holds significant growth potential and is expected to reach $4k or even surpass its all-time high.”
An USA Today report added that there are predictions from artificial intelligence, crypto traders, and analysts about Ethereum’s price by 2025. These estimates range between approximately $6,000 and above $21,000, with industry experts anticipating a price of nearly $7,500.

2. Shiba Inu Is Becoming An L2

Cryptocurrency investors assess the vigor of a Layer-1 blockchain by collecting and interpreting statistics related to usage and achievement in the foremost Layer-2 decentralized apps (DApps) that are widely adopted.

An vibrant ecosystem featuring an engaged user community, substantial trading activity, and consistent expansion patterns typically translates to a more secure investment with superior yields. The burgeoning popularity of Shiba Inu, a successful meme coin that operates on the Ethereum network as an ERC20 token, serves as a compelling harbinger of Ethereum’s potential prosperity in the second quarter.

At first, Shiba Inu was similar to Dogecoin and emerged as a lighthearted cryptocurrency in August 2020. However, unlike DOGE, which is based on proof-of-work and can be mined, SHIB has evolved into a comprehensive Ethereum-scaling ecosystem featuring Layer-2 solutions. Instead of final settlement occurring directly on the base chain like with DOGE, decentralized apps in SHIB operate using Ethereum’s underlying technology for improved efficiency.

In April, there was a staggering 1,000% increase in a significant metric for Shiba Inu, which left many impressed. Earlier in the month, a key Shiba Inu developer shared some significant news. Consequently, numerous cryptocurrency investors are fearful of being left behind and are eagerly anticipating potential Ethereum profits in 2024.

3. L2 – Polygon, Arbitrum, and Optimism Scaling

During the second quarter, Polygon (MATIC), Arbitrum (ARB), and Optimism (OPT) – apart from Shiba Inu – have shown significant growth as Ethereum’s Layer-2 scaling solutions. A glance at their X.com activity logs on Mondays reveals a surge in new projects and development efforts, which is an optimistic indicator for Ethereum’s price trend.

Games are leaving Polygon? Check again.
Gaming on Polygon amassed 700k+ Unique users in the past 7 days and 1.3m+ Unique users in 30 days.
Total users have grown by 1113% and txns by 1290% over the past 7 days.
GameOn 2.0 will take it to the next level ($30k rewards )
1/
— sanjay.moca (@FlyeKitesJay) April 19, 2024

Polygon Labs recently retweeted a post by a gaming content creator that reported, “Games are leaving Polygon? Check again. Gaming on Polygon amassed 700k+ Unique users in the past 7 days and 1.3m+ Unique users in 30 days. Total users have grown by 1113% and txns by 1290% over the past 7 days.”

In the meantime, Arbitrum declared, “Fraud Proofs advanced us to a Stage 1 rollup. Now, with the launch of BOLD, we’re progressing towards becoming a Stage 2 rollup! The feature, BOLD, allowing permissionless validation on Arbitrum, is now active on the testnet.”

On Monday, OP Labs expressed optimism about interoperability between their Superchain L2s with the announcement that Celo’s Layer-2 will be built using Optimism on Ethereum. Additionally, AltLayer introduced a new Layer-3 on Monday, which is powered by Arbitrum and Eigenlayer.

The test network for DODO_Chain, a multifunctional trading platform operated by AltLayer and backed by Eigenlayer and Arbitrum, has been launched by AltLayer.
Experience uninterrupted trading across multiple chains with DODOChain’s interlinked liquidity network – the future is Omnichain!
— AltLayer (@alt_layer) April 22, 2024

4. Ether TVS On Sharp Uptrend

The total value represented by the tokens being held in a proof-of-stake cryptocurrency system, at a specific moment, is referred to as the “total value committed” or “market value of tokens secured.”

In simpler terms, Bitcoin addresses the issue of preventing fraudulent transactions and ensuring network consensus in a decentralized system through the use of energy-consuming mathematical puzzles called proof-of-work, along with a chain of verified solutions called a blockchain.

In simpler terms, smart contract cryptocurrencies address the same issue through enabling users to deposit tokens to function as network validators. The greater the total value locked (TVL), the more favorable it is for the token’s worth, assuming all other factors remain constant.

The total value locked (TVL) in Ethereum is currently high, making it an intriguing prospect for investors fearful of missing out (FOMO). As we approach the end of April, Ethereum’s TVL stands at over $53 billion. In comparison, its closest rival, Tron (TRON), has a TVL of only $8.6 billion, according to CoinGecko. Data from Cryptoquant reveals a consistent increase in Ethereum’s TVL from April 2021 to March this year.

Approximately $29 billion out of the total TVL (Total Value Locked) is currently being staked using Lido and Liquid Staking, while around $14 billion is being re-staked via EigenLayer, and approximately $9 billion is being staked through Aave’s lending platform, according to recent data from DefiLlama.

FUD:

Here are some headwinds working against Ethereum prices in Q2 2024.

5. Prediction: Ethereum ETF Delay At SEC

Several investors are experiencing fear of missing out on Ethereum’s price surge in Q2, yet the future of this asset isn’t entirely optimistic. A significant risk to Ethereum’s value continues to be posed by the U.S. Securities and Exchange Commission (SEC).

The threat the SEC poses to Ether prices is two-pronged. Firstly, the commission is pushing to have ETH tokens labeled as securities. Secondly, a potential delay in approving an Ethereum ETF for Wall Street investors is another concern.

VanEck believes that Ethereum ETFs might surpass Bitcoin ETFs in popularity once they are approved, according to their perspective. Firms like Fidelity and VanEck have been anticipating the approval of an Ethereum ETF, but they predict that the SEC will not grant it by the late May deadline.

6. SEC Investigating Ethereum As Security

At the same time, the Securities and Exchange Commission (SEC) is actively pursuing a legal route to label Ethereum, the second-largest cryptocurrency, as a security based on recent reports in Fortune Crypto from March 20th.

The commission has served subpoenas to several businesses regarding their interactions with the Ethereum Foundation, fueling rumors that the SEC intends to file lawsuits and classify ETH tokens as securities.

The advancements concerning this issue pose an ongoing threat to investors holding long positions in Ethereum and act as a hindrance to the cryptocurrency’s price growth. If the Securities and Exchange Commission (SEC) manages to carry out its efforts, Ether may face significant negative publicity (FUD).

7. Competition From Bitcoin and Other PoW Chains

In 2024, the Decentralized Finance (DeFi) industry sector is experiencing remarkable growth, making it one of the fastest-expanding sectors globally. However, investors’ uncertainty regarding putting money into Ethereum is fueled not only by its impressive growth but also by the increasing competition from proof-of-work blockchains such as Bitcoin, Dogecoin, Bitcoin Cash (BCH), Litecoin (LTC), Ethereum Classic (ETC), and Stacks (STX).

In the year 2023, meme coins based on smart contracts such as Bonk Inu, Shiba Inu, Pepe, Floki Inu, and dogwifhat contributed significantly to cryptocurrency growth. These digital currencies might repeat their success in 2024, potentially reaching new height levels once more.

After the Bitcoin halving has occurred in the past, the attention in the year 2024 might change towards the issue of supply and scarcity, bringing advantages to deflationary proof-of-work blockchains.

8. Competition From Solana, Cardano, and Avalanche

Certainly, Ethereum investors face competition from other DeFi blockchains such as Solana, Cardano, and Avalanche. Notably, Solana has gained significant attention lately, with altcoin analyst Guy Turner at Coin Bureau predicting a potential 100% price increase to reach $300 for Solana’s investors.

In the meantime, there could be a significant development for Cardano (ADA), as indicated by its technical indicators on the chart. Notably, Avalanche (AVAX) recently recorded a daily transaction volume of $329 million, a figure last seen in May 2022.

2024-04-23 20:17