Analysts have extremely bearish forecast for second biggest cryptocurrency on market
According to technical analysis shared by Bloomberg analysts, Ethereum is potentially reaching the $1,000 range for the first time in two months. The main reasons are a potential spike in volatility and various factors hinting at the continuation of the downtrend.
The main thesis of analysts is Ethereum’s breakdown below the 50-day moving average, which usually acts as a barrier between bull and bear trends. Unfortunately for Ethereum investors, the second biggest cryptocurrency crossed the line for the second time this year, which shows the complexity of the situation.
In addition to moving averages, analysts use the stochastic indicator, which compares the current price to a certain range in the past and is used to determine market momentum. According to this, Ethereum is going to continue its path for an unknown period of time.
The $1,000 threshold will most likely be reached in the coming days, says the co-founder of Fairlead Strategies. To reach the psychological threshold in the next few days, Ethereum would need to drop another 35% from current values.
How likely is it to drop $1,000?
Fortunately, it is not yet clear what could provide such heavy selling pressure on Ethereum in just a few days, given the successful testing of the merge upgrade and the lack of technical issues.
The last time Ether lost around 40% of its value in just a few days was the UST catastrophe that pushed the market into consolidation for a month. As for now, the industry remains relatively calm despite continuing macroeconomic issues that affect both digital assets and financial markets.
At press time, Ethereum is trading at $1,584.
