Will Ethereum Go Up? – ETH Price Back to $1k After Drop Under $900

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The price of Ethereum briefly declined below $900 during the weekend as the crypto rout intensified at a point when all other financial markets remained close.

The Federal Reserve’s decision to hike its benchmark interest rate by 75 basis points last week has triggered another wave of negative momentum for risky assets including cryptos.

As a result, the market capitalization of the smart contracts network created by Vitalik Buterin dropped to its lowest level since January 2021 at $112 billion while also posting a new year-to-date low.

However, ETH progressively recovered on Sunday and it is now standing at $1,128 per coin during this morning’s early crypto trading action.

Even though crypto enthusiasts have been excited about the project’s upcoming merge – an event that will result in the network’s migration to a proof-of-stake (PoS) protocol – this has not prevented the sell of as ETH has shed nearly 70% of its value since the year started compared to 56% BTC has lost during that same period.

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What is “The Merge” and How It Can Affect the Performance of ETH?

“The Merge” is an event in which the Ethereum mainnet, which is powered by proof-of-work (PoW) is combined with the Beacon Chain – the new blockchain that will be powered by PoS.

According to the project’s official website, the merge is expected to occur in the last two quarters of this year. By shifting to PoS, Ethereum’s developing team expects to increase the blockchain’s scalability and security while reducing transactional costs at the same time.

In addition, the PoS consensus mechanism is considerably eco-friendlier than its peer. In this regard, data from Consensys indicates that PoS manages to reduce energy usage by 99.9%.

Even though Ethereum’s developing team primarily focused on the scalability issues, the launch of various reliable layer-two protocols that increase transaction speeds and reduce gas fees have deprioritized this subject and has shifted their attention to making the merge happen.

Polygon, Arbitrum, and Immutable X are among the most prominent solutions launched by Ethereum developers to address the network’s scalability issues.

Once the PoS mechanism is adopted, ETH investors will be able to stake their tokens via both centralized and decentralized exchanges. This will enable validators to increase their participation in the blockchain, meaning that they will be assigned a higher number of blocks to process and record on Ethereum’s decentralized ledger.

Ethereum Price Predictions 2022 – 2025

ETH/USD (Coinbase) price chart – Source: TradingView

The chart above shows that the price of ETH has broken multiple relevant areas of support in the past couple of weeks. Currently, the $900 level remains a key line in the sand if traders are expecting a rebound following the token’s sharp downtrend.

Currently, ETH is trading 61% below its 200-day simple moving average and 77% below its 52-week high of $4,867 per coin.

It would take a sizable shift in the market’s sentiment for the token to move back to those levels in the medium term. In addition, momentum readings remain negative as the Relative Strength Index (RSI) has dropped to its lowest level in over 2 years while MACD is also on track to drop to a multi-year low.

If the price breaks below $900, chances are that ETH may experience a drop to the $500 level. This results in a 56% downside risk based on today’s price.

Predictions from Wallet Investor, an algorithm-based forecasting service are bearish as the price is expected to decline to the low 800s in the next 14 days. As for the mid-term, the same service expects to see ETH climbing to $2,732 per coin a year from now resulting in a sizable 142% gain.

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