Ethereum, the largest altcoin, remains excited due to the upcoming updates in September. Despite this, investors are having a hard time relying on ETH with their life savings as falling funding rates continue. Bloomberg analysts, on the other hand, revealed a disaster. Experts say that in a collapse scenario, Ethereum will fall back to 3 digits in two months.
Bold predictions of analysts reveal 40% collapse in Ethereum price
According to Bloomberg analysts, Ethereum (ETH) is potentially heading towards the $1,000 threshold. The main reasons are a potential increase in volatility and various factors that indicate the continuation of the downtrend.
In addition to the moving average, analysts use the stochastic indicator, which compares the current price to a specific range in the past and is used to determine the momentum of the market. Accordingly, Ethereum will continue to decline for an unpredictable period. The co-founder of Fairlead Strategies says the $1,000 threshold will likely be reached in the coming days. To reach the psychological threshold in the next few days, Ethereum will need to drop another 35% from current values.
How likely is a $1,000 drop?
Fortunately, given the successful testing of the merge upgrade and the absence of technical issues, it is not yet clear what could bring such a huge selling pressure on Ethereum in just a few days.
The last time Ethereum lost around 40% of its value in just a few days was the UST disaster that pushed the market into consolidation for a month. For now, the industry is relatively calm despite the ongoing macroeconomic issues affecting both the cryptocurrency and financial markets.
expectations vs reality
Not everyone agreed that ETH could rise above the massive $1.6k resistance line. In fact, it aligns with the (possible) short-term downtrend, as renowned analyst Lark Davis has warned. In addition, according to the August 30 Bloomberg report:
ETH could drop to $1,000 for the first time in two months, and the second-largest cryptocurrency could have volatile price swings before the much-anticipated Merge upgrade.
Ether, which topped $2,000 just this month, could soon drop to $1,000 or less, charts indicate https://t.co/zV9JTtuneY
— Bloomberg Crypto (@crypto) August 30, 2022
Cryptocoin. com As we have mentioned, the “merge” is considered one of the greatest events in the history of Etehreum. Having said that, ETH’s demand after the merge will not completely disappear overnight. For example, see a CryptoCompare report:
Ethereum investment products rose 2.36% in assets under management (AUM) to $6.81 billion during August, outperforming Bitcoin products, which fell 7.16% to $17.4 billion.
Also, open interest continues to grow even in the options market. This shows that market participants show high interest in ETH.
