Tom Lee: Ethereum at $3,000 is Considered the Most Undervalued Asset
On December 9th, Ethereum experienced a significant breakout from a falling wedge pattern, signaling the beginning of a new uptrend. Tom Lee, Chairman of BitMine, remarked that Ethereum’s price near $3,000 is undervalued, emphasizing the asset’s potential for growth. However, a recent drop below the 20-day EMA slope could intensify selling pressure and lead to further downside movement in Ethereum’s price.
During Friday’s U.S. trading hours, Ethereum’s price declined by more than 4.4%, settling just above $3,000. This dip mirrored Bitcoin’s retracement to $90,000, following a risk-off sentiment in the market after the Federal Reserve’s 25bps rate cut on December 12. Despite the overall market caution, Tom Lee highlighted Ethereum’s undervaluation, suggesting that the current price does not reflect the asset’s true worth.
In the past three days, Ethereum’s price retreated from $3,450 to $3,094, marking an 11.75% loss. The market correction was influenced by the Federal Reserve’s conservative stance on inflation, which reignited concerns about economic growth and triggered a risk-averse attitude among crypto investors. As a result, spot Ethereum ETFs experienced a substantial outflow of $42.3 million on Thursday, further fueling the bearish sentiment in the market.
Tom Lee’s recent remarks at the Binance Blockchain Week in Dubai on December 4 shed light on BitMine’s confidence in Ethereum. Lee expressed that trading Ethereum at around $3,000 is significantly undervalued, attributing recent market fluctuations to leverage unwinding by institutional players. BitMine’s acquisition of nearly 100,000 ETH in the last week demonstrates their bullish outlook on the asset, hinting at a positive trajectory for Ethereum’s price in the future.
Looking ahead, Tom Lee predicted a significant rise in Bitcoin’s price to $250,000 in the upcoming months. He suggested that if the historical valuation relationship between Ethereum and Bitcoin restabilizes, Ethereum could be valued at $12,000, with a potential surge to $22,000 on a stronger recovery ratio. Institutional interest in Ethereum remains strong, with BitMine continuing to increase its holdings as part of a long-term investment strategy.
The recent price action in Ethereum shows a bearish reversal from the 200-day exponential moving average, indicating a dominant bearish sentiment among market participants. The coin’s current price level is critical as it tests the flipped support of the falling wedge pattern, which buyers breached earlier in the week. If Ethereum manages to hold this support, a 20% recovery to $3,657 followed by a spike to $4,264 could be expected. However, a bearish breakdown reentering the wedge range would invalidate the bullish thesis for Ethereum’s price movement.
Overall, despite short-term market fluctuations, Tom Lee’s optimism regarding Ethereum’s potential for growth and BitMine’s continued accumulation of ETH suggest a strong belief in the asset’s long-term value. The evolving market dynamics and institutional interest in Ethereum point towards a positive outlook for the cryptocurrency.
