Ethereum and the crypto market turned red as the U.S. Federal Reserve (Fed) Chairman Jerome Powell hinted at “more pain” for global markets in the coming months. Two of the largest cryptocurrency market caps returned to crucial support zones, and may be at risk of more losses.
Ethereum (ETH), currently trading at $1,580. There has been a 7% and 15% losses over the past 7 days and 24 hours. In a relief rally, the second cryptocurrency led altcoins and outperformed Bitcoin.
Now, Ethereum’s price performance might be forecasting a spike in downside pressure for the altcoins sector as investors flock back into Bitcoin. This downside movement might be explained by the Bitcoin Dominance Chart finding support on the daily charts after trending downwards since July 2022.
At that time, Ethereum core developers confirmed good progress on “The Merge”, the event that will complete ETH migration to a Proof-of-Stake (PoS) consensus. The market participants prepared for this event over the past two years with a bullish bias.
However, analyst Justin Bennett has made emphasis on the possibility of “The Merge” operating as a “buy the rumor, sell the news event”. This could cause Ethereum to drop in support.
As seen in the chart below, Ethereum might be forming a “Head and Shoulders” pattern, hinting at future depreciation. This could be confirmed if ETH’s price breaks below $1,400 in the coming days ahead of “The Merge”. Bennett saidWhile sharing the following chart:
This potential $ETH head is beginning to develop on the right shoulder. Confirmation below $1,500 (…). You’ll want to keep an eye on this potential head and shoulders for $ETH. If confirmed, the measured goal aligns with $1k support.
Will Ethereum Turn Bearish Ahead Of “The Merge”?
Market cap second cryptocurrency still has important levels that could help support bullish momentum for the coming weeks. September will be a critical monTh as “The Merge” has been scheduled for around the 15thTo the 16Th.
Economist Alex Krüger also shared a bearish thesis for cryptocurrency. Drawing a comparison between this event and the Bitcoin “Halving”, when the network reduces its mining rewards, the economist claims the trend has been predominantly to the downside.
This theory could be confirmed if the price of Ethereum sees a spike in upside volatility as it heads into “The Merge”. Krüger said:
The merge-halving analogy may not be perfect. While the code for the halving makes it a set of rules that cannot go wrong and the code for the merge allows nothing to go wrong, the merge can make things go terribly wrong. On the date of the merge, the latter can cause a great deal of uncertainty.
