Last Drop Below $1,000?

Since last November, the cryptocurrency market has seen many declines. However, the last few weeks have had a more bitter aftertaste than the others. After the Terra Classic (LUC) crash, we finally dare to claim the existence of one bear market. Among the cryptocurrencies that have suffered this fall, Ether (ETH) is being closely watched. The eternal outsider Bitcoin (BTC) is about to finally make the switch Proof of use with the merge update and it is expected that this change will result in an upward push. However, we are also seeing a number of declines. Breaking below $1,000, Ether (ETH) crosses a symbolic level. Due to the loss of a character, its course has unfortunately just canceled the previous one bull market. Have we reached the bottom in Ether (ETH) price or should we expect further declines?

Ethereum, ETH, Ether, Bear Market, Dollar, ETHUSD, ETHUSDT
  • Ether (ETH) at $1,000: sad signal
  • An unfavorable economic environment for cryptocurrencies
  • Will The Merge come out of this tunnel?

Ethereum (ETH) at $1,000: The symbolic threshold not to be crossed

The start of the weekend was bumpy for themEther (ETH). This dropped precipitously from $1,076 to $986 in less than two hours. Bitcoin (BTC) fell almost 10% in 24 hours and fell below $20,000. You have to go back to December 2020 to find Bitcoin at this value. At the time, hitting $19,450 was good news billed as a “push” related to proposed US regulations stablecoins.

The two most important cryptocurrencies are now below their token barriers, $20,000 for bitcoin and $1,000 for ether. That of ether is even more true than by losing a number classes opens up a whole field of possibilities and it is even easier to imagine successive reductions. Especially since breaching these thresholds could trigger a wave of “forced liquidations”, which in turn could drive prices even lower.

Bitcoin (BTC) fell below its December 2017 high of $19,834 on Saturday. This matches the top of the previous ones running of the bulls. In previous bear markets, Bitcoin (BTC) had never fallen below the high of its previous bull run. This threshold is therefore doubly symbolic. Ether reached $1000 in January 2018. It lost it when crypto winter started in February 2018. After regaining that level in January of last year, it had never dipped below $1,000.

An unfavorable economic environment for cryptocurrencies

This bear market prevailing has several causes that reinforce the cyclical dynamics of the markets. So we need to go back to where the market was two months ago. Despite the winter recession, we didn’t talk about it that clearly bear market. Meanwhile, the Terra (LUNA) crash changed the situation. This fall of one of the most visible ecosystems has shown that everything can disappear very quickly. We then witnessed a survey of retail investors and a general fear began to calm down.

The macroeconomic conditions did the rest. After announcing record inflation in the United States (more than 8% over a year), the FED felt interest rates needed to be raised. The increase in these prices by another half point was the ultimate trigger for the decline. the running of the bulls 2020-2021 had benefited from very low interest rates, a rate needed to prop up the economy during the Covid crisis. This turning of the screw comes at a time when the crypto market is weakened. The drop below the 28,000 support for Bitcoin led to a series of sell-offs. So the drop in ether got Celsius into trouble. These liquidation stunts ended with the fall below the $20,000 support a few days ago.

Will Ethereum Creator and The Merge Update save the market?

The economic environment is not favorable for a market recovery cryptocurrencies. However, the development of the Ethereum network could restore investor confidence. Ethereum has been expected to transition to for years Proof of Stake is an issue of uncertainty. Will miners agree to remove their graphics card from the network? Is there any risk of data loss (especially to NFTs) when updating The Merge? Given all these questions, a successful update could be a strong signal for the resumption of the classes of ether and the entire market. Scheduled for late summer, it should be preceded by several months of gloom.

The weekend we have just experienced has created a moment of great excitement. The fall of Bitcoin (BTC) and Ether (ETH) below their symbolic support of $20,000 and $1,000 has left us in a bottomless pit. Luckily the end of the weekend was lighter and support was found in Extremis. However, this episode shows the fragility of the cryptocurrency market. Thinning out over several months seems difficult to imagine.

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