Is Ethereum still a buy at $4,000?

By: Milko Trajcevski
Milko Trajcevski
Milko leverages his passion for cryptocurrencies and teaches investors something new each day. During his spare time, he loves… read more.
on May 10, 2021
Updated: Jun 22, 2021
  • Ether, which is the native currency on the Ethereum blockchain, has grown by over 2,000% over the past year.
  • The rising demand for Ethereum from DeFi and NFTs could explain the surge.
  • The next potential price target for Ethereum is $4,300 or $4,500 with a potential downside to $3,500.

The price of Ether, Ethereum’s native cryptocurrency managed to bypass the $4,000 mark for the first time in its history. At the start of 2021, it was trading at $738 which implies an appreciation of 400% in just a few months. 

The key question on investors’ minds Is it too late to buy Ethereum amid the recent surge? 

Ethereum versus bitcoin analysis

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Ethereum DeFi projects tend to rely on the Ethereum blockchain, and as such, have been implementing the technology such as Pickle Finance, SyncBond, Ark Gallery, DAOVentures, and Polkastarter. 

Ethereum’s better use case may have played a role in cryptocurrency’s outperformance versus Bitcoin. 

On April 1st of 2021, Ethereum was valued at $1,935, while on April 30th of 2021, Ethereum was valued at $2,763. That’s an increase of approximately 42.79%.

By comparison, on April 1st of 2021, Bitcoin was valued at $59,210, while on April 30th of 2021, it was valued at $54,500, which is a decrease of approximately 7.95%.

Should you buy ethereum now?

Ethereum has made a big leap of value in a short period of time, so if you decide to buy Ethereum (ETC), the next price target could be $4,300, or even $4,500. On the other hand, if the price of Ethereum falls below $3500, it would signal a strong “sell” signal for investors because the support level failed to attract buyers.

Short-term investors should be cautious

Ethereum has successfully attracted the attention of many investors, as well as dApp developers, and has seen a lot of popularity due to the rise of Non-Fungible Tokens (NFTs) and their value. This bodes well for the long-term prospects of Ethereum.

Getting a better cue for short-term investors isn’t an easy task given Ethereum recorded multiple new highs over the past few months with little resistance. The classic investment saying of “the trend is your friend” may be the right strategy for near-term investors as the trend is clearly favorable. 

But much can change in a short period of time. Investors looking to buy today may want to set up a stop loss near the $3,500 price as a dip below this key level could signal the start of a bear market.

Bottom line

Momentum is clearly on Ethereum’s side and investors with a long-term timeframe should be able to withstand any near-term selloff given the long-term prospects. 

Speculators and short-term investors on the other hand should be prepared for a swift exit, either at the next potential price target at $4,300 to $4,500 or if the stop loss is triggered at around $3,500.

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