KEY POINTS

  • Bears pushed ETH to as low as $225.71 before closing at $237.64, reversing all gains of the previous day
  • ETH is still in an uptrend that could be maintained in the next few days or weeks
  • Despite the selloff, Ethereum's DeFi ecosystem and upcoming proof-of-stake transition continue to affect price sentiment

A well-known technical analyst predicts that the price of Ethereum could reach $300 by the end of June. Charts aside, reasons to be bullish on ETH include the growth of Decentralized Finance (DeFi) and the upcoming switch of the Ethereum network to the proof-of-stake (POS) mechanism.

Ethereum opened Monday at $248.7 on Coinbase, slightly above the closing on June 1. As Bitcoin slid down, so did the second largest cryptocurrency. Bears pushed ETH to as low as $225.71 before closing at $237.64, reversing all gains of the previous day.

Despite the selloff, popular crypto trader GalaxyBTC remained bullish, sharing on Twitter that the current pattern is suggesting a retest at $200, where the trader said they will place a long position and ride it to $300 by end of the month. This sentiment is shared by other traders, including “Crypto King”, who has 18,000 followers on the social networking site.

Ethereum’s price chart closely resembles the behavior of Bitcoin’s. Because of this, many traders look at Bitcoin’s charts to analyze if ETH will follow. The trading group “Trading Surfers”, which look at Elliot Wave as their key indicator, said Bitcoin might be poised to go down after this recent rally, implying that Etherum might follow. However, because their analysis painted a bearish scenario, it naturally sparked debate in the Crypto Twitter community.  

Despite the decline, ETH is still in an uptrend that could be maintained in the next few days or weeks. Popular trader Crypto Michaël, who has 56.7K followers on Twitter, shared a chart suggesting that the uptrend will remain valid if ETH bounces on the $215 level.

The bullish sentiment on Ethereum is not just an effect of Bitcoin’s show of strength amid the current health crisis and economic situation. The Decentralized Finance (DeFi) ecosystem has recovered from the March 2020 crash and now boasts a total of $949 million in total locked value, according to DeFi Pulse, the majority of which is locked in Ethereum. According to Ryan Selkis, chief executive of research and data firm Messari, stablecoin progress and DeFi give ETH a higher celling.

Finally, the highly-anticipated switch of Ethereum from proof-of-work (POW) to proof-of-stake (POS) will likely have an effect on its value. This upgrade, dubbed Ethereum 2.0 will transfer the validation of transactions from miners to “transaction validators” who will lock up (stake) their tokens as collateral for the right to verify the transactions on the network.

David Schwartz, a senior software engineer at Nash crypto exchange said it is hard to be bearish with Ethereum now that staking is coming soon.

“I suspect there will be a lot more staked than the projected 10-30 million, perhaps even 50 million-plus if a lot of people select to stake through exchanges/rocket pool,” he added.

Ethereum, Bitcoin In this photo illustration, visual representations of the digital Cryptocurrency, Bitcoin and Ethereum are pictured atop a Japanese 10,000 yen note on March 20, 2020 in Katwijk, Netherlands. Photo: Yuriko Nakao/Getty Images