Ethereum May Rally To $3k If Bulls Hold On To Long Position


The price of Ethereum (ETH) was in poor health on Tuesday, dropping nearly 6% to the south and dropping below $2,800. On the other hand, the bulls were waiting to jump in and buy ETH at a steep discount. Ethereum price is up 2.5% in early trading and appears to be heading back to $3,018.55, reversing Tuesday’s losses.

Ethereum may recover

Ethereum’s price was affected by dismal earnings from Alphabet, Wall Street’s favorite tech stock, as Youtube lost market share to Tik Tok. Investors quickly rebalanced and reassessed the situation, eventually ignoring the news this morning because earnings remain solid, and no material reports on future losses have been released.

As the fallout from the Alphabet disappointment, the price of Ethereum is ready to cash in, as trading opened on the ASIA PAC at a staggering discount of just under $2800.00. The bulls quickly snatched parts of the price action and are preparing to recoup all of Tuesday’s losses, bringing the price back to $3,018.55. From there, it’s just a short distance away, at $3,163.35. If earnings reflect excellent news in the coming days, expect the buy side to explode to $3,391.52, resulting in a 20 percent profit.

Ethereum

ETH/USD trades close to $3k. Source: TradingView

With Facebook numbers expected to be released this evening, a turnaround is possible. Expect a big drop in the Nasdaq index, which will bring cryptocurrencies to new lows, if Facebook surprises the downside with fewer users and less income from advertising earnings. The price of ETH will drop to $2,695.70 and then $2,574, representing a loss of 10%.

Related reading | Will Ethereum Skyrocket Merge ETH?

Ethereum integration is a concern

There are some concerns to be aware of, one of which is the approaching ‘consolidation’, which will see Ethereum switch from a Proof of Work model to a Proof of Stake model, resulting in a 99.95 percent drop in total energy consumption. Bloomberg’s Mike McGlone explained:

“The merger, transforming Ethereum from a Proof of Work to Proof of Stake model, will turn Ether into a stock-like instrument with elegant bid/ask dynamics that can generate significant interest in the asset. Ether holders (validating owners) are entitled to a share of future revenue (fees). ) generated on the network, with EIP-1559 dictating a portion of the fee (about 70%) to be burned (similar to a buy-back) and the rest distributed as a bonus (profit)”

But, as McGlone warned, there are still plenty of errors that can go wrong with the “merging” process. With cryptocurrency’s current association with risky assets such as technology stocks, which were seeing a big sell-off in April, the near-term price outlook looks bleak. As a result, McGlone does not rule out Ethereum dropping to $1,700, its lowest level since last summer.

If the stock market drops further and lowers the tide for risky assets, Ethereum could repeat last summer’s performance and revisit around $1,700. By getting rid of long positions with weaker leverage, Ethereum reached a new high around $4,800 in November. Ethereum is facing headwinds along with most risky assets as the Federal Reserve battles the highest inflation in 40 years. We see the potential for a return in the stock market as a fundamental headwind to Ethereum.”

Related reading | TA: Ethereum revisits $2.8K, why the difficulties may be limited

Featured image from Shutterstock, chart from TradingView.com



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