The price of Ethereum has increased by 1% over the last 24 hours, and at $1,269, it has recovered 15.8% from its five-month low price of $1,095.18 on Thursday. This low occurred as a result of the repercussions from the FTX collapse, which continues to put the market at risk of contagion.

The price of ETH has now decreased by 72% over the past 12 months, making 2018 its worst year since it fell by almost 90%. Even while Ethereum has undergone significant improvements and development over the past several months, this won’t be enough to counteract the persistent pessimism of investors, particularly as long as macroeconomic conditions stay unfavorable.

Today’s Ethereum Price

Ethereum Price Prediction

Ethereum’s chart at this time depicts a coin that may be starting to recover. Its relative strength indicator (purple), which was at 30 just a few days ago and is now surging toward 50, indicates that some momentum has been regained.

Given that it is again getting close to its 200-day average (blue), ETH’s 30-day moving average (red) also suggests that momentum may be returning. Technically and chartistically speaking, ETH should soon experience a comeback rally because the coin is undervalued in comparison to recent levels.

Of course, there is still a great deal of uncertainty and unrest in the market. The FTX bankruptcy and collapse undoubtedly caused the most immediate and direct harm, but other businesses, especially those that FTX or Alameda Research invested in, may see difficulties in the following weeks.

The sector is well aware of the possibility of contagion it faces, and many exchanges are taking every available step to reassure their investors and clients that their individual finances are stable. For instance, Changpeng Zhao, CEO of Binance, announced the establishment of an industry recovery fund yesterday. This fund would likely aggregate resources to be used in the event that a major company experienced a liquidity problem.

It is still questionable at this point if such steps will be sufficient to stop all potential contagion effects given the magnitude of FTX and Alameda Research. Investors should therefore be cautious because ETH (along with other cryptocurrencies) may face greater declines in the upcoming weeks and months.

It’s interesting to note that none other than Ethereum co-founder Vitalik Buterin has highlighted the likelihood of further declines, as he reportedly sold out roughly 3,000 ETH (worth about $3.75 million) on November 12 after confirmation of FTX’s insolvency. Although engineers who are familiar with Buterin have contested that the wallet in issue belonged to him, the dumping of substantial amounts of ETH highlights the fact that whales expect continuous decreases.

Commentators have also asserted that regulators will have to scrutinise the remaining ecosystem more closely as a result of the stunning failure of FTX. This includes Ethereum, which some claim has increased the likelihood of enforcement action by switching to proof-of-stake.

Despite these worries, ETH is still one of the market’s most fundamentally sound coins. It is without a doubt the largest layer-one blockchain in terms of total value locked in, having famously — and successfully — made the switch to a proof-of-stake consensus method in the middle of September.

Additionally, it appears that after the aforementioned Merge, ETH has been deflationary, with fewer new coins being created and more coins being burned. Ironically, the demise of FTX has ironically contributed to the coin becoming even more deflationary as holders have been removing their ETH from exchanges, increasing the number of transactions and, thus, the amount of burning.

This would imply that ETH is in a very strong position to make some significant gains once the global economy and cryptocurrency market both revive. Although they are unlikely to occur this year, there are some hesitant indications that the world economy may be slowly recovering as US inflation is beginning to decline and the war between Ukraine and Russia is progressing.

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