Ethereum
Crypto Analyst Says Ethereum Price Will Drop To $2,500, Here’s Why
Ethereum price closed reflecting Bitcoin’s performance recently and since Bitcoin Price followed a downward trend, the price of ETH followed. However, Ethereum alone appears to have more bearish fundamentals compared to Bitcoin, leading crypto analysts to believe that the second-largest cryptocurrency by market capitalization will decline further from here.
Ethereum is on the verge of further collapse
A crypto analyst known as Shin Forex took to the TradingView website to share an interesting analysis of the Ethereum price. The analysis, focused on the ETH/BTC chart, revealed worrying developments in the price of ETH.
The analyst explained that during this period, Ethereum’s liquidity decreased. Instead of flowing towards altcoins like ETHit rather flows towards Bitcoin. This suggests a growing disinterest in Ethereum from investors, and as liquidity flows into Bitcoin, Ethereum has nothing to support it at the moment.
Additionally, the crypto analyst explains that the ETH/BTC pair has now fallen below its support of 0.05. However, this fall below its support level is important given what happened at each breakout. Shin Forex recalls the last two market cycles, one in 2016 and one in 2019, from ETH/BTC breaking below its support.
Both times this happened, a collapse in price followed, before it was able to rebound again. The crypto analyst doesn’t expect this time to be any different and believes that ETH/BTC will fall below 0.04. If this happens, it will be send Ethereum spiraling and the analyst has set a price target of around $2,500 for it.
Can ETH price survive the crash?
In the short term, the price of Ethereum does not look very good, especially since altcoin is currently trending down in its current channel, according to the crypto analyst. However, zooming out to a longer time frame can help give an idea of how the ETH price might move after the crash.
Looking at the Shin Forex chart from the last two times a formation like this happened, it also set a precedent for money moving back into Ethereum. In November 2016, the price crashed, but within a few months there was a massive recovery. ETH/BTC reached a new all-time high.
Source: TradingView.com
A similar situation occurred the next time in 2019, with the crash preceding a market recovery, albeit a bit slower at that time. So, if this trend continues, then the ETH crash is inevitable. However, a recovery is expected this will likely trigger the start of another massive rally.
For now, bears continue to dominate the market. Ethereum Market and managed to bring the price down below $3,000. It trades at. $2,975 at the time of writing, with a slight decline of 0.36% in the last day, according to Coinmarketcap.
ETH price falls below $3,000 | Source: ETHUSD on Tradingview.com
Featured image from Quora, chart from Tradingview.com