Ethereum has fallen again on Friday, as it looks like we are testing the $1400 level. During the Thursday session, the long-awaited “Merge” finally happened, and Ethereum celebrated by dropping 10%. I’ve been wanting for a while that this was not something that was going to send the market straight up in the air and that it was more likely than not going to be a “sell the news” type of event. We are now down about 13% from that event.
No matter how you look at it, and no matter what you think the future is going to be, Ethereum is a risk asset. It needs a “risk on environment” to rally significantly. Yes, we recently had rallied from a steep drop to the $900 level, but a lot of that had to do with the excitement building up to “The Merge.” Now that it has been accomplished, there’s not a lot going on. In fact, something that is particularly distressing is that most of all transactions processed after this merge are being done by just 2 nodes! There goes the idea of decentralization, at least for now.
Looking to Buy the Dip
- Nonetheless, I do think that Ethereum has a future. However, I like the idea of buying it at much lower levels. I think that if we get some type of acceleration in risk aversion, Ethereum and Bitcoin are both going to get slaughtered.
- I think this bear market is nowhere near being over, as the US dollar is like a wrecking ball for everything it gets near.
- Remember, crypto is priced in US dollars, even though it is in theory supposed to be outside of that world.
- In fact, in a twist of irony, crypto markets desperately need the Federal Reserve to start loosening monetary policy to really get things going in the Ethereum and Bitcoin markets.
The $1200 level underneath could be the next target, followed by the $900 level. If we break there, then Ethereum will find its way down to $400 given enough time. I still think this is very possible, although it may take a while to get down there. Once we get anywhere near that level, I am more than willing to start building up a bigger position over time, as I think we could see a nice investing opportunity after a washout.
Ready to trade our Forex trading predictions? Here are some excellent Forex brokers to choose from.