Up 18% in a month, could it still be worth buying Ethereum at its current price?

Let's investigate the bull and bear case.

| More on:
A woman sits on sofa pondering a question.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Ethereum and of the broader crypto market have made a substantial recovery
  • Catalysts include the Federal Reserve signalling that future interest rate hikes might not be as severe
  • However, one analyst believes the rally could be the result of price manipulation and that traders are due to take profits and send the market lower again

The Ethereum (CRYPTO: ETH) price is up 18% over the past month, and it currently rests at the $2,453 level.

The cryptocurrency is struggling year to date, being down around 50%. It has made a recovery since touching an apparent bottom in June, but it has gone through some wild swings since then.

Meanwhile, Bitcoin (CRYPTO: BTC) is also up over the past month, having gained more than 5%. The coin currently trades for $32,002 apiece.

As a risky and speculative asset, cryptos like Ethereum are generally one of the first markets that short-term investors withdraw their funds from and into safer investments such as dividend stocks.

With the crypto market recovering, this could be a sign that investors have started to take a little nibble again at riskier assets. The question is whether this momentum will last moving forward.

Let's take a look at both sides of the argument for investing in Ethereum at its current price point.

What the bulls say

There's good reason to believe that crypto investors are feeling confident about the Federal Reserve's intention to lessen the pace of interest rate hikes, as reported by CoinTelegraph. This may help ease pressure on risky assets such as cryptocurrencies as well as give share investors some breathing room.

The market could also be rallying in anticipation of the release of a number of earnings reports from crypto and web3 companies this week, as reported by The Block. Some companies that are due to announce earnings include Coinbase (NASDAQ: COIN), Robinhood (NASDAQ: HOOD), and Coinshares (STO: CS).

And then on Twitter, Real Vision CEO Raoul Pal posted a bullish tweet stating that he believes Ethereum will continue its bull run.

Pal said:

Is the ETH/BTC ratio the single most bullish major asset price chart in the world? Might well be…

What the bears say

On the opposite side of the argument, there is some evidence that could be interpreted as investors being cautious and taking profits while they can, which could pump the brakes of a continuing rally.

This insight was reported by Be In Crypto on Monday, with active Ethereum addresses making lower lows on the daily charts.

It was suggested the rally could also be artificial and the result of significant Ethereum holders, known as whales, depositing large amounts of the crypto on exchanges, causing prices to rise.

Additionally, it said Ethereum could have reached a temporary price ceiling, with sellers able to take further profits during the peak euphoria of the crypto's rally before coming back down to earth again.

Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Cryptocurrencies

A man clenches his fists with glee having seen the share price go up on the computer screen in front of him.
Cryptocurrencies

Why did the Bitcoin price just rocket to another all-time high?

At new record highs, Bitcoin now has a market cap of almost US$1.8 trillion.

Read more »

Bitcoin coin with a rising arrow.
Cryptocurrencies

Why cryptocurrencies like Bitcoin and Ethereum are shooting for the moon today

Crypto investors just sent the Bitcoin price to new all-time highs. But why?

Read more »

A man with his head on his head because of the falling cryptocurrency prices on the screen.
Cryptocurrencies

What's happening with the Bitcoin price amid the stock market volatility?

Bitcoin investors have been on a wild ride in August.

Read more »

bitcoin coins falling
Cryptocurrencies

Think the ASX has been volatile this week? Wait until you see the Bitcoin price

Bitcoin has had the volatility of a yo-yo over the past week...

Read more »

A businessman carrying a briefcase looks at a square peg or block sinking into a round hole.
Technology Shares

Is this the real reason Block stock is down 11% in a week?

Block's big drop this week might have an unusual culprit...

Read more »

Bitcoin ETF digital illustration.
Cryptocurrencies

Bitcoin ETF hits the ASX. Here's what you need to know

History is being written on the ASX today as it welcomes its first Bitcoin ETF.

Read more »

Concept image of Bitcoin and hand using laptop.
Cryptocurrencies

Buying Bitcoin? Here's why Block's Jack Dorsey says AI will drive global adoption

Moving forward, Block plans to reinvest some of its monthly profits into Bitcoin.

Read more »

A man holding a mobile phone walks past some buildings
Cryptocurrencies

The Betashares Crypto Innovators ETF (CRYP) is up 37% in a month. Is it too late to buy?

Looking at the CRYP ETF? Here's my take on whether it's too late to buy.

Read more »