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According to a recent Bloomberg article, John Roque of 22V research believes that Ethereum might fall to $420, a loss of 80% from its present price, and here’s why.
Ethereum May Fall 80%
The trader believes Ethereum, which is presently trading at $2,000, is about to break through the support zone and will most likely fall below $420. Roque drew attention to a price range in which $3,580 is the top and $2,000 is the bottom.
With Ether falling below $2,000, it is no longer within the previously specified range and will begin to fall to the next significant chart support at around $420.
Source: 22v Research
Because the second-largest cryptocurrency is rapidly losing value, it has fallen below all moving averages, including the 50-, 100-, and 200-day lines. The above-mentioned indicators’ downward movement is a significant bearish factor for any asset.
Ethereum is also oversold on both the weekly and daily charts, according to Roque, which is why it cannot rally in the foreseeable future.
ETH/USD trades aroun $2k. Source: TradingView
While the analyst claims that Ethereum is basically “over” key support levels for the second largest cryptocurrency on the market may still be seen. On the weekly chart, for example, traders have yet to test 200-week average support.
Related Reading | Bitcoin Indicator Hits Historical Low Not Seen Since 2015
ETH Exchange Supply Rising
Santiment, an on-chain data provider, gives us an insight into what Ethereum’s next price action might be (ETH). On an 8-hour chart, large shorts for Ethereum at $2,000 have built up, according to the data provider.
However, according to Santiment, this normally doesn’t work out with the shorter, and a short squeeze is likely to ensue. As a result, the price of Ethereum may rise again.
Data shows funding rates history. Source: Santiment
The ETH exchange supply is another item to consider. Santiment observes:
“While we saw a nice drop in supply on exchanges for the past year or so, May 1st 2022 saw a huge increase in supply on exchanges as folks rushed to exit their positions, which is clearly reflected on the price itself.”
As a result, any future increase in the exchange supply will cause another decline. This indicates that investors are panicked and have given up totally. Although the situation appears to be dire, this may be an excellent time to fill new roles.
Related reading | Ethereum Hashrate Breaks All-Time High, Will Price Follow?
Featured image from iStockPhoto, Charts from TradingView.com
