The crypto market is currently in a significant decline. At the time of publication, the price of the main currency Bitcoin had fallen to $17,000 after reaching around $18,500 before the Fed’s interest rate decision. However, the correction is more difficult for many altcoins, including Ethereum. ETH/USD is now down to $1,200 from $1,350 on Wednesday. The minus equals more than 11 percent.
High trading volume indicates the sale of Ethereum
Apparently there seems to be a big sale on Ethereum tokens right now. This is also supported by the very high trading volume since the interest rate decision. In the last 24 hours alone, nearly $16 billion worth of ETH has been transferred. This value is surpassed only by Bitcoin and the stablecoin Tether (USDT). The trading volume with USDT is by far the highest of any cryptocurrency, totaling nearly $55 billion in a 24-hour period.
This can indicate that a large number of investors are currently selling their ETH and converting it into the stablecoin. Apparently, many fear another fall in prices at the end of the year and are withdrawing from their investments to be on the safe side. The money is “parked” in stablecoins to buy cryptocurrencies again later, or the funds are completely withdrawn from the crypto exchanges and exchanged back into US dollars or other fiat currencies.
Bitcoin bull Michael Saylor is critical of Ethereum
Author and founder of Trader University Matthew R. Kratter recently made statements about Ethereum that weren’t exactly bullish. In a video with Bitcoin investor Michael Saylor, known for his multi-billion dollar purchases of BTC, Kratter said that the transition to proof-of-work could be very critical for Ethereum. Because after the Ethereum Merge, many validators equipped with sufficient ETH are needed to verify transactions.
However, if more users in the network sold their Ethereum, for example because the price was falling, the security of the entire network would be at stake. According to Kratter, this problem could be a death spiral for Ethereum. Kratter even thinks that the blockchain may collapse completely and buyers of ETH will rise in prices, as observed with Terra (Luna) this year.
Mediator Michael Saylor also agreed with Kratter’s view, stressing that proof of concept for blockchain is a very fragile design and is inherently dangerous. Saylor sees the proof-of-work consensus mechanism as the better technology, that the use of work and energy or the mining process will increase the security of the blockchain.
Was the Ethereum merger a mistake?
According to Kratter and Saylor’s assessments, it would be a mistake if Ethereum changed its consensus mechanism. Of course, ETH developers around the founder Vitalik Buterin see it differently and point to the great advantages of proof in terms of energy consumption, hardware requirements and environmental protection. In addition, Ethereum 2.0 should represent the future for the blockchain with higher scalability, faster transaction times and lower fees.
Whether the step towards Proof-of-Stake for Ethereum proves to be the right thing in the long term or whether it was a mistake, only the coming years will tell. It is currently not possible to reliably predict how the blockchain will continue to develop technology, which new applications will be based on the Ethereum network and how user behavior and the goal of wide mass adaptation will develop.
ETH/USD with 82 percent correction
However, the reality is that ETH buyers are not particularly euphoric at the moment when looking at ETH price action this year. From a high just below $4,870 in November 2021, the price has temporarily fallen to $880. That’s a drop of almost 82 percent. ETH is still trading more than 75 percent below its all-time high.
This means that the loss of the ETH/USD course is slightly higher than the Bitcoin course. On the positive side, however, Ethereum has not made a lower minimum since the summer of this year and the $1,000 mark is an important support in this bear market.
So where will the price go in the last 2 weeks of this year and will there be another crash in 2022? Technical chart analysis can provide information on potential price targets.
Ethereum price prediction: ETH between $110 and $3000
Looking at the small 1-hour chart, ETH/USD can be seen with today’s correction to the downside breaking a key support zone at $1,217. Now it remains to be seen whether the price will manage to rise above this zone again within the trading day or whether the sell-off will continue. The latter would indicate that price is forming a bearish double top on the 1 hour chart. The technical price target of this chart pattern is around $1080.
In this bearish scenario, the price could quickly reach the next key resistance zone at $1,070. As can be seen on the daily chart, there is very strong support for Ethereum price in this zone. Since June 2022, ETh/USD has found support here several times and was then able to start an uptrend again.
If ETH finds support here again, the story of a bullish double bottom is still in place. However, the price should not fall below the minimum of 880 dollars on June 18. This would invalidate the chart pattern. If there is a successful pullback, the technical price target is around $3,000 for ETH.
However, if Ethereum price sustainably falls below the mentioned support, the formation could also be a bearish head and shoulders pattern. Then, in the worst case, the ETH/USD exchange rate would risk crashing to the technical price target of just $110.
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