Following an all-time high (ATH) reached last August, Ethereum (ETH), the market’s second-largest cryptocurrency, has found itself in a consolidation phase, trading between $4,200 and $4,700.
Notably, Citigroup, the third-largest investment bank in the United States, has tempered expectations for the Ethereum price, forecasting a year-end price target of $4,300 for the altcoin.
However, the bank cautions that the recent price strength may be more a reflection of market sentiment than underlying fundamentals.
In a note released on Monday, Citi remarked, “Current prices are above activity estimates, potentially driven by recent buying pressure and excitement over use-cases.”
Despite these developments, Citigroup predicts that the inflow of exchange-traded funds (ETFs) into Ethereum will be less robust compared to Bitcoin. In contrast, Standard Chartered has recently revised its year-end target for Ethereum significantly upward, from $4,000 to $7,500.
Citi also presented a more optimistic bull case, projecting a potential price of $6,400 if activity and adoption of Ethereum-based applications continue to rise. This would represent a major 42% uptrend ahead for the leading altcoin.
Furthermore, the digital asset bank highlighted that as liquid Ethereum reserves on exchanges diminish and demand intensifies, the possibility of a supply squeeze arises, potentially sending the altcoin into a new leg up to retest all-time high levels.
As of this writing, ETH is trading at $4,480, which is up 5% on the weekly time frame. Compared to record prices, the altcoin is trading nearly 10% below all-time high levels.
Featured image from DALL-E, chart from TradingView.com
