Many Ethereum enthusiasts are currently in a FUD state. Since the beginning of 2021, good news and major developments in the Ethereum community were taking place. This all halted with the recent crypto market crash, where it seems that simple dumping occurred, rather than fundamental flaws. The Ethereum blockchain is better than ever, and more tech adoption is happening from companies around the world. Despite the positive news, Ether’s price seems to be weakening still. What will happen to the Ethereum price? Will Ether drop below USD 2,000 and stay there?
Ethereum Price Prediction – Technical Analysis
The story so far – a Harsh Crash
Following the latest crypto crash, it seems like Ether’s price got hit very hard. Prices fell from a high of USD 4,375 to a low of USD 1,730 losing around 60% in market capitalization. This crash happened in a systematic downtrend with no signs of rebound. But this happened to the entire crypto market with the exceptions of stablecoins of course, which gained in market cap despite their price peg. This is due to investors and traders deciding to “halt” their trading activities, until prices recover and buy the lows of their favorite cryptos.
Zooming Out shows a different story
On the other hand, when we look at the overall picture from a macro perspective, we notice a different story. The upcoming EIP1559 in June 2021 is a well-awaited event in the Ethereum community that is expected to bring lower fees, thus higher volumes. Additionally, from a technical perspective, we can notice that Ether’s price is still on an uptrend. This past crash that occurred was a mere correction to the previous uptrend, which broke the uptrend channel, then corrected back inside the uptrend channel. In figure 2, we can clearly see how the Ethereum price is still part of an uptrend YTD. The only people who are in the red are the ones who bought at inflated prices. Smart traders and investors NEVER do that.
Despite the crash, Ether is up more than 240% in 6 months, which is pretty impressive for any kind of investment. You might be saying that well, the downside is scary, but in fact the upside trumps the downside. If you enter the market correctly, being able to sit back and relax would be your daily activity in such turbulent markets.
Ether Trade SETUP
If you are looking to know how to approach your Ether holdings, read on. There are basically two scenarios for different people: buyers BEFORE MAY and buyers AFTER MAY:
- For Buyers before MAY: Your portfolio barely got affected by the latest crash. You should definitely HODL and only liquidate if prices go lower than USD 2,000 and stay there. In the latest crash, prices briefly went below 2K but directly adjusted back. What you’re looking for is an extended price consolidation below 2K in order to liquidate and catch lower prices.
- For Buyers after MAY: Your portfolio got knocked out. It’s okay though, that’s the game. What you should do is look for potential trend reversals. For example, if prices continued to sink lower slowly as it is the current case, look to directly liquidate, and you’re in a tough spot. But also do keep a close eye on the 2K level, as this is a very important one.
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