Ethereum (ETH): Evaluating the Journey to $4K after Latest Crash

  • Ethereum has its price retesting the $3,000 – $2,800 support confluence.
  • Downsides actions beneath the barrier might catalyze a massive fall towards $2,000.
  • Near-term on-chain metrics indicate a further downward move for the leading altcoin.

The downward moves since last week have Ethereum price arriving at a crucial support floor. The bearish phase sees ETH hovering at a break or make level, suggesting possible actions to ether directions. Nevertheless, continued downtrends by Bitcoin would witness the smart contract crypto plummets.

The Merge and First Test

ETH developers have promised vital upgrades to the ecosystem, taking it to Proof-of-Stake (PoS) from Proof-of-Work (PoW). Ethereum has been delaying most of its updates. However, Ethereum seems a step closer to the most-anticipated Merge, thanks to the developers’ latest test.

Though the platform is yet to announce the official date for the upgrade, market players await massive ramifications, ranging from high transaction cons, top-notch security, and reduced environmental impacts, among others.

Meanwhile, developers conducted the test on a shadow fork. That was to avoid impacting the main chain. Developer Parithosh tweeted that merge panda had arrived, and the team was finalizing while producing blocks.

BitMEX official Arthur Hayes commented that the ‘merge’ could attract institutional investors since Ethereum would act as a de facto bond due to increased yields than Treasury bonds. Hayes added that Ethereum could hit $10K before the year-end.

The Optimist’s Viewpoint

Ethereum price lost nearly 17% after rejections around the 200-day SMA at $3,491. The move emerged after several rejections on 13 January and remained a critical development that saw the alt dropping beneath $3,136, the VP’s (Volume Profile) high volume node.

Nevertheless, this downward action pushed Ethereum towards its nearest support confluence around $3,000, comprising the demand zone at $2,820 – $2,966, the 50- and 100-day Simple Moving Averages. Thus, a rebound from the area can launch another leg-up.

The resulting uptrend should overcome the $3,136 high volume node and battle the 200-day Simple Moving Average at $3,491. However, it can extend higher, filling the low volume node stretching towards $3,703. Amplified bullishness would see ETH flying to a $4,000 psychological area.

The Pessimistic Viewpoint

Meanwhile, a pessimistic case sees ETH breaching the $3,000 – $2,800 support confluence. A clear move beneath this zone would see bears dominating the markets. That way, ETH can drop to $2,541. That is a vital support that should prevent more downswings to $1,968. However, BTC recording massive bearishness can mean Ether exploring sub-$2,000.

The 30-day MVRV supports the bearish narrative. The index shows average loss/profit by investors that purchased the alt over the past month. For now, it hovers at -6, but a local bottom seems to form at -10, indicating more room for southward actions.

Though forces appear to balance, Ethereum’s support confluence remains crucial in determining what the further has for the alt. breaching the area may knock Ethereum towards $2,500 before exploring $1730 lows. Meanwhile, a rebound would see an upside move towards the 200-day Simple Moving Average at $3,491 before retesting the psychological zone at $4,000.

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