It is a downward spiral for the crypto market, particularly Ethereum and other altcoins. Market cap fell $50 billion to $950 billion over the weekend. It eventually fell below the $1 trillion mark. This was due to the fall in Bitcoin, Ethereum and other crypto currencies.
After the Federal Reserve’s annual meeting on August 26, this trend was evident. Jerome Powell gave a speech in which he reiterated the Federal Reserve’s plans to maintain its hawkish approach towards fighting inflation. The crypto- and equities markets plunged after the speech.
The crypto market continued to fall from that point until the early hours of August 29th. The crypto market is showing a positive trend at this writing, which was mid-day on Aug 29. Ethereum is trading now at $1,517.81 after recovering 2.63% from its morning losses.
The price correction started early on August 29, placing ETH’s price at $1,451 and reducing its market cap to $177 billion. According to IntoTheBlock data, ETH now trades under two main supply zones.
Analyst Explains Bearish Prediction
Based on MartinezThe two supply areas Ethereum traded in were $1,475 & $1,560. 585K addresses bought $2.81 Million worth of Ethereum from the first supply zone. The second supply zone holds 3.44 million ETH worth to 526K addresses. Support can be only at $1,335, which means that 412K addresses purchased 2.2 million worth ETH.
Ali Martinez sees a potential bearish trend on the basis of support zones. Secondly, Martinez pointed out that the daily Ethereum network growth in the space has been at its lowest in two years, which doesn’t signify a positive position.
Martinez said that Ethereum’s daily number of new addresses saw a peak in 2020 with the creation of 49,700 on the same day.
Instead of increasing, the number of Ethereum addresses has fallen. This indicates a longer price correction period.
How about the Ethereum Merge?
Many investors believed that Ethereum’s upcoming upgrade would propel the market higher. The current events suggest that the Merge might have been priced in.
After dropping below $9,93 in June 18, Ethereum was at $1,000 by the end June. However, the cryptocurrency recovered quickly and gained over 90%. As the price continues to fluctuate between $1.450 and $1.550, there is a 25% return from the peak.
The power and potential of macro have outstripped any optimism about the future upgrade. Now, investors are looking at the $1,335 level, which might be ETH’s last supply zone. If the price falls below that level, a more severe correction could occur.
Featured image taken from Pixabay. Charts from TradingView.com