- On December 9th, the Ethereum price gave a decisive breakout from the falling wedge pattern to kickstart a fresh recovery trend.
- BitMine Chairman Tom Lee described ETH near $3,000 as materially undervalued
- A recent breakdown below the 20-day EMA slope could accelerate the bearish momentum in the ETH price.
ETH, the native cryptocurrency of the Ethereum blockchain, slips over 4.4% during Friday’s U.S. market hours to trade just above $3,000. The drawdown aligns with Bitcoin’s pullback to $90,000 as the broader market witnessed a risk-off sentiment after the Federal Reserve’s 25bps rate cut on Dec 12. Despite the risk of extended correction ahead, BitMine’s Tom Lee stated that the Ethereum price is grossly undervalued.
Tom Lee Calls $3,000 ETH Undervalued as BitMine Boosts Accumulation
Over the last three days, the Ethereum price witnessed a brief pullback from $3,450 to the current trading value of $3,094, projecting an 11.75% loss. The downturn can be attributed to the U.S. Fed’s decision to cut the 25-bps rate on Wednesday.
While initially bullish, the Fed’s cautious guidance on inflation reignited growth concerns and triggered a risk-off sentiment in the crypto market. The correction trend gained additional momentum as spot Ethereum ETFs recorded a $42.3 million outflow on Thursday.
While the risk of prolonged correction persists, a fresh remark from Tom Lee accentuates the strong conviction of BitMine, the largest corporate treasury holder for Ethereum.
During a keynote discussion at Binance Blockchain Week in Dubai on December 4, BitMine Chairman Tom Lee said trading Ethereum at around $3,000 is significantly underpriced: He attributed recent drops across cryptocurrencies to a position unwinding by the leveraged players, discounting links with traditional multi-year patterns in the sector.
Lee showed that Ethereum prices have most likely hit their low for now. To support this belief, his company acquired nearly 100,000 ETH in the last week, which is an uptick from half that amount added in the previous fortnight.
Looking ahead, Lee predicted that Bitcoin will rise to $250,000 in the coming months. Should the valuation relationship between Ethereum and Bitcoin return to historical norms, he projected Ethereum could be trading at $12,000. A stronger recovery in that ratio could take it as high as $22,000, based on his remarks.
What stood out in the comments was the continuing interest of institutional players in Ether with larger market adjustments. BitMine continues to accumulate its holdings as part of a strategy with a notable share of the asset’s supply.
Ethereum Price Stands at Key Pivot Level
The recent downswing in the Ethereum price shows a fresh bearish reversal from the 200-day exponential moving average. The EMA slope is primarily used to gauge the long-term direction of an asset. The new lower high formation below the 200-day EMA suggests bear dominance and intact sell-the-bounce sentiment among crypto participants.
Today’s downtick in the ETH price, backed by a notable jump in trading volume, suggests strong conviction from sellers for another breakdown. Currently, the coin price stands at a pivot level for testing the flipped support of the falling wedge pattern, which buyers breached on Tuesday.
If the price holds this support, the altcoin could extend its recovery some 20% to hit $3,657, followed by a leap to $4,264.
On the contrary, if the ETH price reenters the wedge range with a bearish breakdown, the aforementioned bullish thesis will get invalidated.
Also Read: 21Shares Expands U.S. Crypto Lineup With XRP ETP Listing
