Despite the sharp fall in Ethereum (ETH) this year, Wall Street’s Tom Lee is still spreading his strong bullish sentiments. Lee commented that Ethereum still had enough reasons to increase its value and believes the cryptocurrency is about to rally strongly. He said the last few times Ether “underperformed peers by two standard deviations,” a “major trend reversal” was in the offing.
“We believe Ethereum is about to stage a trend reversal and rally strongly,” he said in a note to clients Thursday.
The second largest cryptocurrency by market capitalization has been one of the worst performing altcoins in 2018. Since hitting a record high of close to $1400 at the beginning of the year, Ethereum has lost over 70 percent of its value. This is partly due to the technical difficulties the platform is having in scaling, according to observations by some crypto enthusiasts. In August alone, the cryptocurrency’s price dropped by 33% from $420 to $280.
In his prediction, Lee, managing partner and head of research at Fundstrat Global Advisors, has based his argument on the historical performance of the altcoin. Traditionally, when ETH has underperformed peers by two standard deviations, the price trend saw a successive reverse.
Ether is the name of the cryptocurrency, but it is more often than not associated with the Ethereum blockchain. Ethereum Blockchain uses Ether to act as a unit of value used in its own complete programming languages, Ethereum Virtual Machine (EVM), to power Distributed Applications (dApps) and Smart Contracts.
Lee maintains that Eth will hit $1,900 by the end of 2019. His price prediction is nearly 40% higher than Ether’s all-time high of $1,349, recorded at the beginning of this year. At the time of writing, Ethereum trades at $230, according to data from CoinMarketCap. That means the price of the cryptocurrency will skyrocket by over 700% by the end of next year, should Lee’s prophecy come to pass.