Ethereum Poised for V-Shaped Recovery, Fundstrat’s Tom Lee Says

TLDR

• Tom Lee predicts Ethereum will experience another V-shaped recovery similar to past price declines.
• Ethereum has fallen more than 50% eight times since 2018, but it has always bounced back quickly.
• Despite a 37% decline in the past 30 days, Lee remains confident in Ethereum’s recovery based on historical trends.
• BitMine analyst Tom DeMark identifies the $1,890 price level as a potential bottom for Ethereum.
• Ethereum staking demand remains strong, with a record 71-day wait to stake and over 36 million ETH staked.

Tom Lee, the head of research at Fundstrat, expects Ethereum to bounce back swiftly from its recent declines. He believes the asset is poised for another “V-shaped recovery,” as it has experienced eight such recoveries since 2018. Despite the current dip in prices, Lee is confident that Ethereum will follow its historical pattern.

Lee pointed out that Ethereum has fallen more than 50% on eight separate occasions since 2018. In each of these instances, it has managed to recover at the same pace that it fell. “A lot of people are frustrated, but keep in mind that Ethereum, since 2018, has fallen more than 50% eight times,” he said at a Hong Kong conference on Wednesday.

Ethereum’s price fell sharply last year, declining by 64% from January to March. However, Lee believes that this decline mirrors past trends and Ethereum will likely experience another V-shaped recovery. According to Lee, nothing has changed in the fundamentals of the asset, and Ethereum will bounce back as it has done in the past.

Ethereum Faces Price Struggles, But Strong Staking Demand Persists

Ethereum has been struggling to maintain its price above $2,000, with a sharp drop leading to a current price of $1,970. The cryptocurrency faced a 37% decline over the past 30 days, hitting $1,760 on February 6. Despite these price struggles, market analysts like Lee remain optimistic about Ethereum’s near-term future.

BitMine market analyst Tom DeMark has highlighted the $1,890 price level as a potential bottom for Ethereum. DeMark suggests that this level may be tapped twice in an “undercut” before the asset begins its recovery. Lee agreed with this assessment, calling it a “perfected bottom” and expressing confidence in Ethereum’s eventual recovery.

Ethereum’s price history suggests that after each substantial decline, the asset has managed to recover rapidly. In the past, Ethereum has experienced a swift reversal after hitting its bottom, and this trend has continued for several years. As such, many investors see the current dip as an opportunity rather than a reason to panic.

Ethereum Staking Shows Strong Demand Despite Price Decline

Ethereum’s price dip has not deterred investors from staking their assets. Data from ValidatorQueue shows that the wait to stake Ethereum has reached an all-time high of 71 days. This indicates strong demand for staking, with a record 4 million ETH in the validator entry queue.

The percentage of Ethereum supply that is staked has also reached a record high of 30.3%, equivalent to 36.7 million ETH. Despite the modest 2.83% annual percentage rate (APR) on staked Ether, analysts point out that investors are still lining up to stake their assets.

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