The Ethereum price has been closely tracking the performance of Bitcoin in recent times, and as Bitcoin experiences a downtrend, Ethereum has been following suit. However, it appears that Ethereum is facing more bearish fundamentals compared to Bitcoin. Crypto analysts, including Shin Forex, have pointed out concerning developments in Ethereum’s price. The liquidity in Ethereum has been decreasing, with investors shifting their focus towards Bitcoin instead of altcoins like ETH. This lack of interest in Ethereum is causing liquidity to flow towards Bitcoin, leaving Ethereum unsupported.
One of the key indicators of Ethereum’s bearish trend is the fact that the ETH/BTC pair has broken below its support level of 0.05. Historically, whenever the ETH/BTC pair has broken below support, a significant price crash has followed. Shin Forex references the previous market cycles in 2016 and 2019 when similar breaks led to price crashes in Ethereum. The analyst predicts that ETH/BTC could fall below 0.04, potentially sending Ethereum’s price spiraling down to around $2,500.
In the short term, the Ethereum price does not look promising, with the altcoin trending downward within its current channel. This downward trend is further supported by a 0.36% decline in the price over the last day, with Ethereum currently trading at $2,975.
Despite the current bearish outlook, there is a glimmer of hope for Ethereum. By analyzing past market cycles, there is a precedent for Ethereum to bounce back after a price crash. In both 2016 and 2019, Ethereum experienced a crash followed by a significant recovery that led to new all-time highs for the ETH/BTC pair. This pattern suggests that while a crash may be imminent, a recovery could kickstart another massive rally for Ethereum in the future.
The bearish fundamentals surrounding Ethereum suggest that the price may continue to fall in the near term. With declining liquidity, breaking below key support levels, and a general lack of interest from investors, Ethereum is facing significant challenges. However, looking at historical trends, there is a possibility for a recovery and a subsequent rally for Ethereum in the future. Investors should proceed with caution and closely monitor the developments in the market to make informed decisions regarding their Ethereum holdings.
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