The cryptocurrency market is still stunned by last week’s precipitous decline. In 10 days, Ether shed around 45 percent of its value.
On the four-day chart, the Ethereum (ETH) price has now returned to the historical RSI low recorded in 2018 when the cryptocurrency traded at $81.
On Saturday, ETH values fell below crucial levels and are currently trading in the triple digits as the recent crypto sell-off continued.
According to data provided by Coingecko, as of the time of writing, ETH is trading at $1,008, a decrease of about 40 percent over the past week.
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Ether Drops To As Low As $997
ETH is currently selling at $997.61 on Etherscan, a decrease of approximately 9 percent over the last 24 hours. The breach of this support level is expected to presage heavier losses for Ethereum.
The bears are in complete control of the market, and there are no major buyers. In the bearish scenario, if sellers force the price below $900, the probable demand zone is between $700 and $900. Upon reaching this region, ETH may enter the accumulation phase.
Currently, inflation, a wobbly stock market, rising interest rates, and worries of a recession are fueling negative sentiment on the stock and cryptocurrency markets.
ETH total market cap at $122 billion on the daily chart | Source: TradingView.com
A Shot At $1,700 In A Bullish Scenario
In a bullish situation, ETH will certainly approach $1,700 in static resistance. The ability to overcome this barrier depends on the purchasing power of the market.
This eventuality seems unlikely given that the current macroeconomic climate has caused investors to view high-risk assets with skepticism.
Recent reports indicate that Ether’s developers have opted to delay the network’s move to a proof-of-stake (PoS) consensus while the bear market persists.
This improvement is anticipated to terminate the reliance on proof-of-work (PoW) mining and the Merge scalability solution, which has been in development for six years.
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Heavy Market Liquidation Pulls Down ETH
The recent decline of ETH, the second-largest cryptocurrency, is due to the liquidation of a significant investment, possibly by Three Arrows Capital. The liquidation led to a substantial sum of ETH being unloaded on the open market.
After the Federal Reserve raised interest rates by 75 basis points, the highest increase in the last three decades, the stock market inched up Wednesday afternoon.
According to Edward Moya, a senior market analyst at OANDA, the fact that the cryptocurrency market did not follow is “worrying for some investors.”
Analysts estimate that Bitcoin and Ether can decline up to 85 percent during bear markets.
Due to the impossibility of market prediction and timing, there is never an “ideal” time to buy in cryptocurrencies. However, according to analysts, now could be a good time to enter the market because prices are cheap.
Featured image from Arch20, chart from TradingView.com