Analysis of Ethereum, the second-largest cryptocurrency by market cap, points to an impending recline in its price, analysts claim on Bloomberg. According to them, there could be a rise in volatility level accompanied by other details to make this bias happen.
A Look At Indicators To Evaluate Price Moves
The arch premise they founded this theory on was the 50-Day MA. An assessment of this indicator is said to identify moments in price development when buyers and sellers are in play. However, the MA shows that sellers are currently in the picture.
Eth has cut through the line to the downside, looking at price movement based on this indicator. An indication that bears are holding their position in the market. And if this continues longer, bears will overpower bulls. Hence, taking Ethereum price much lower.
Another indicator that waves a plausible bear play on ETH is the Stochastic Indicator. Analysts use the stochastic indicator to assess price momentum when it is overbought and oversold. When the SI is 80 or above, it denotes that price is overbought, while when the SI is 20 or below, it means the price oversold.
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Stochastic indicates a 33.01 range on the daily timeframe. Momentum around that range suggests the price recently oversold, and sellers are still in control.
Based on these indications, technical analysts believe the possibility of more sell-offs is at hand. The co-founder of Fairlead Strategies thinks $1k is the next price target in the few days to come. According to him, it will require a 35% rate in Ethereum declination to land price on the $1k mark.
What are the chances of a drop to $1k?
Retrospectively, the reason behind the previous fall in ETH price by 40% was the crash of TerraLabs, which sent panic to the market, causing all cryptocurrencies to take a plunge. The whole market appears to be in recovery, even with the economic situation of the United States.
However, there are no confirmed fundamentals to back up the possibility of the price plunging to $1k from $1,594, where it is trading now. Although, the Merge, which some thought could be a price recliner, doesn’t seem like much after testing positive on the upgrade, and showing no detection of technical malfunctions.
The Ethereum merge, which would change its consensus mechanism from Proof-of-Work to Proof-of-Stake, was scheduled to fall between September 10 and 20. Exchanges, developers, and investors are preparing ahead of it. The Merge will bring about upgraded functions in the algorithms designed to execute transactions on the ETH or ERC-20 network.
Whether or not it might later affect the price of Ethereum is unknown. Notwithstanding, developers working on the upgrade noted the possibility of high volatility during the process. Therefore advising investors to stay “SAFU” with their funds as no one knows what may happen.