Key Insights
Ethereum has crashed 9% on intraday charts.
Risks are high for a collapse below $3000 levels.
Expert predictions indicate a move above $10k.
Ethereum is headed above $4000 on short term basis.
Ethereum has crashed 8% showing a massive price correction despite the broader markets correcting at a lower rate. This price correction has triggered several risks for ETH as it continues to decline despite a bull rally in the broader markets.
Ethereum had seen its price subdue below $4k levels after its ETFs were approved in June 2024. Despite multiple attempts, ETH was unable to breach $4000 in 2024.
Ethereum Crashes 9% Intraday at Press Time.
CoinMarketCap
Ethereum crashed after US jobs data (JOLTS) showed more openings than predicted. Combined with a higher rate of inflation, this could trigger the US Fed to make even lesser rate cuts. The Fed has already indicated the possibility of only a 50 bps (0.5%) rate cut in 2025 owing to average inflation predictions of 2.5% or higher.
Typically, a rate cut is only done when the economy risks going into deflation or recession. A rate cut injects more liquidity in the markets triggering a higher job growth. Since job openings are already higher at this point, there is little to no reason for the US Fed to make more interest rate cuts.
For the crypto economy, this is however a bad news. More rate cuts would have injected greater liquidity into the crypto markets. Now since the job opening are already at a better level, the market risks missing out even on the expected 0.5% rate cut this year.
This has triggered a sell-off in Ethereum via retail markets and ETFs. Yesterday, Ethereum saw a net outflow of $87 million from its ETF markets.
As Ethereum struggles to keep its price above $3000, a further sell-off could trigger a further correction in its price. From the current level of $3350, another 10% to 12% correction this week would mean a dip below $3000, which could dissolve all the gains made after Donald Trump's win.
At a moment when Bitcoin has again attempted to move beyond $100k, Ethereum risks falling to pre-US-election levels. However, other market participants, except retailers, do not seem to be in a hurry to sell.
Ethereum whales have been accumulating ETH and taking them off the exchanges in smaller transactions, similar to Dollar Cost Averaging. This opportunity has allowed them to buy 168,000 ETH in an hour over the last weekend.
These whales seem to focus on the long-term prospects of Ethereum, which alone as a project supports over 50 blockchains, has thousands of Dapps on its EVM, and supports over $65 billion in TVL. Further, with the deployment of major scaling upgrades in the next one year, Ethereum could force multiple Layer-1s out of business with its cheap transactions and superior security.
Cryptopreneur and Bankless co-founder Ryan Sean Adams has doubled down on his $10k Ethereum prediction. Ryan earlier claimed Ethereum's status as a Triple Point Asset could lift its fair valuation above $10k. This week Ryan commented on the possibility of Ethereum being used as a reserve asset due to the same reasons.
The status of being a reserve asset could also limit the supply of Ethereum in circulation forcing its price to rise in a rather parabolic manner. Ethereum is predicted to be the backbone of financial markets in the future. The entry of corporate sector or governments in this could make a huge difference, similar to what we saw for Bitcoin.
Another top analyst, Ali Martinez has shown that in the current scenario, Ethereum has been moving in an ascending triangle pattern. By continuing on this path, Ethereum remains aligned to its $6000 goal in the near future.
According to the charts, as long as Ethereum remains above $2750 this week, the risk of falling to bearish levels remains low.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.