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FxWirePro Poll: Ethereum seen to rise but not recoup 2018’s drastic losses

Ethereum will recover some of its losses made last year and hit the $500 rate by end-2019 on hopes of demand recovery, an FxWirePro poll showed, but a global economic downturn and regulatory challenges are the biggest downside risks over the coming year.

The second most popular cryptocurrency by market capitalization, the bruised Ethereum, lost over 80 percent in 2018 as investors turned overly pessimistic regarding the digital currency’s performance. That is in line with the crypto giant, bitcoin, which also faced a heavy sell-off last year. But the digital currency, Ethereum, recovered a little early this year.

According to a median forecast of 15 research organizations and institutional investors, taken September 2-13, Ethereum prices were forecast to hit $500 by December this year. Interestingly, except one, all other firms predicted the ETH/USD to gain from the current rate of $180 with a high of $2500. Wallet investor forecasts the ETHUSD to decline to the lowest since 2017 of $11.18.

"There was a lot more buzz around adoption following the Q2 2019 Bitcoin surge, with many mainstream names coming out in support of blockchain integration. Demand for web 3.0 applications is on the rise, and Ethereum is the blockchain with the biggest front-end application potential. At the same time, profit taking in the aftermath of the rapid Q2 appreciation has triggered a healthy period of correction, while critique of the space from the likes of President Trump and Fed Chair Powell, along with worry associated with fallout in the global economy, are stories that could keep the more risk correlated crypto asset weighed down in the second half of the year. Risk off in the global economy is expected to result in ETH underperformance relative to Bitcoin," noted LMAX Exchange in its September 12 report.

"The market is in the process of a major correction after a surge in the second quarter of 2019. Look for setbacks to be well supported above of previous resistance turned support at 150 on a weekly close basis, in favour of the next major higher low and bullish resumption back towards and through the 2019 high up at 363. Ultimately, only a weekly close below 150 would compromise the outlook."

This recovery in Ether is in line with the market expectations on the Bitcoin, where research firms predicted the BTC/USD would erase much of its losses made last year and breach $15,000 by end-2019.

The Bitcoin is forecast to hit a fresh high of $25,000 by end-2019. While 17 forecast it to surge to $10,000 or more level by December, only four forecasts the prices to rise to $50,000 or more. Only two predicted the BTC/USD to decline and hit as low as $3000.

"Bitcoin enjoyed a spectacular run in the second quarter of 2019, racing to fresh yearly highs, surging towards 14k, on the back of increased adoption and more openness from the traditional investor community. The news of tech giants now turning towards the world of crypto has invited a higher profile that should be a net positive in the long run. Future ECB President Lagarde has just come out in support of cryptocurrencies as well. At the same time, it also exposes the ethos to fresh critique from higher ups at the central bank and government levels. The market is also going through a period of technical adjustment after the fierce Q2 run up, though we anticipate continued demand from institutional players starved for yield in a world where global equities are increasingly vulnerable," LMAX added.

"Overall, look for additional upside to be limited for now, as the market continues to correct and consolidate, in the aftermath of a major surge in the second quarter of 2019. Any setbacks should be very well supported ahead of 7,000, with an eventual higher low sought out in favour of a bullish continuation back above the 2019 high at 13,748. Only a weekly close below 7,000 would compromise the constructive outlook."

FxWirePro is a leading financial analysis company providing real time research to FX participants around the world. To participate in FxWirePro’s monthly cryptocurrency poll, please drop an email with your company details at b.debarati@fxwirepro.com

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