Ethereum (ETH), the second-largest cryptocurrency by market capitalization, was previously outperforming Bitcoin (BTC). However, a recent analysis by DonAlt, a well-known analyst for his accurate predictions, indicates that ETH has the potential to surprise investors.
In a recent video on his YouTube channel, TechnicalRoundup, DonAlt explained that Ethereum has been unfairly undervalued due to its recent market performance. Despite the price drop, which has caused many investors to lose confidence, the analyst believes that the cryptocurrency still has significant potential.
Why does DonAlt believe that Ethereum is undervalued?
DonAlt compared the current situation of Ethereum to what Solana faced when its price fell below double digits. At that time, many considered it a failed cryptocurrency, but Solana then rose from almost zero to $250.
This metric reflects DonAlt's optimistic view of Ethereum's future, despite the recent weak price movement.
People continuously mocked Solana when its price was trading at double digits, then it rose from almost zero to around $250. I believe that Ethereum is in a similar position, but clearly, Solana is pulling part of the supply from Ethereum, as DonAlt explained to his 66,300 subscribers on YouTube.
Additionally, Ethereum faces competition from other cryptocurrencies, such as Solana, which is gaining ground in the ecosystem. However, the analyst believes that ETH remains the better long-term option, right after Bitcoin.
Although Ethereum is not the best-performing asset at the moment, its recovery potential may make it an attractive investment in the future.
Technically, Ethereum shows signs of recovery. The ETH/BTC pair, one of the most important pairs to assess Ethereum's performance against Bitcoin, maintains key support levels on the weekly chart.
This support indicates that ETH may be in a favorable position for a bullish breakout in the near future.
Looking at Ethereum's price history, it is still trading at multiples higher than Bitcoin in 2015. It is also trading at multiples higher than in 2017. It reversed its trend in 2020, which is critical. [...] Clearly, it's not great. But it's not the worst. If I had to choose between long-term digital assets other than Bitcoin, Ethereum would be the optimal choice," concluded the analyst.
ETH maintains strong long-term performance
According to DonAlt, the current multiples of Ethereum are even higher than the multiples of Bitcoin in 2015, indicating that despite ETH's poor performance recently, its valuation remains attractive compared to the past.
In 2020, Ethereum experienced a decline in its movement, which the analyst considers a positive sign that the cryptocurrency may gain momentum for a new upward push.
The analyst also confirmed that although ETH has lost ground against Bitcoin, it still maintains strong long-term performance. Ethereum remains one of the most important options for investors looking for assets with strong long-term potential.
In summary, although many have downplayed Ethereum recently due to its market performance, its long-term growth potential remains strong.
Technical indicators and the cryptocurrency adoption landscape suggest that Ethereum may surprise investors in the coming years, becoming one of the standout assets in the cryptocurrency market.
According to data, Ethereum is trading at $1,847.28 after rising 2.8% in the last 24 hours and 16.6% in the last 14 days. However, the leading altcoin is still 62% below its all-time high of $4,878.26 recorded in November 2021.