Ether’s 1,500% Jump Is Just the Start for Crypto FaithfulBy
Second-largest token has scaled a series of peaks this week
Optimism is overshadowing signs the rally may be overextended
Follow us @crypto for our full coverage.
Cryptocurrency enthusiasts are scaling up price targets for Ether after the second-largest token’s record-breaking run, an echo of the unbridled optimism that accompanied an earlier surge in Bitcoin.
The token affiliated with the Ethereum blockchain -- a digital ledger popular for financial services and sales of so-called cryptocollectibles like online art -- is up about 1,500% in the past year and hit a new peak of $3,455 on Tuesday.
The climb is stirring predictions of more gains ahead even as some technical indicators flash warnings that the rally may be overextended. Crypto proponents argue investors are now looking beyond Bitcoin to Ether and other tokens despite warnings of a stimulus-fueled mania in the sector.
“The market is realizing how fundamentally undervalued Ether is given all the development activity on the network,” said Vijay Ayyar, head of Asia Pacific at crypto exchange Luno Pte. “While one may think Ether has risen a lot, when you compare it to Bitcoin, there is a long way to go.”
Ayyar sees Ether hitting $5,000 to $10,000 by early next year. Evercore ISI technical strategist Rich Ross has revised up his target to $4,100 from $3,900. Many traders are eyeing a run toward $10,000 before the end of 2021, Edward Moya, a senior market analyst at Oanda Corp., wrote in a note.
“Ether will have much volatility, similar to Bitcoin, but can increase in value as more institutional investors become aware of it,” Pat LaVecchia, chief executive officer of crypto broker Oasis Pro Markets LLC, wrote in an email. Ether at $25,000 is possible over the next few years, he said.
Optimists typically cite Ether’s use in applications on the Ethereum blockchain, as well as upgrades to the network to make it more efficient, as among the reasons for their bullishness.
Still, there are indications that Ether’s rally is getting stretched. The token’s 14-day relative strength index has risen above 70 to the highest since January, signaling it may have climbed too far, too quickly.
Luno’s Ayyar said any run like Ether’s is bound to correct, but added that he views its long-term outlook as “very healthy.”
Ether rose 4.2% to $3,425 as of 7:07 a.m. in New York, outperforming the wider Bloomberg Galaxy Crypto Index.
|Bitcoin’s Crypto Dominance Declines as Ether Soars Past $3,000|
|Central Bank-Issued Digital Coins Seen Co-Existing With Bitcoin|
|How China Is Closing In on Its Own Digital Currency: QuickTake|
— With assistance by Eric Lam