- Summary:
- Ethereum price moved sideways as the crypto industry consolidated. It was trading at $1,350 on Friday, the same range it has been this week
Ethereum price moved sideways in the past few days as the crypto industry consolidated. It was trading at $1,350 on Friday, the same range it has been this week. This price is about 33% below the highest level in August and about 72% below the highest level in 2021. Ethereum’s market cap has dropped to about $166 billion, which is much lower than its all-time high of over $600 billion.
Why is ETH consolidating?
There are several reasons why ETH price has been in a consolidation phase recently. First, a ‘buy the rumor, sell the fact’ situation is happening in the market. This is after Ethereum prices jumped to above $2,000 before the merge happened. Now with the merge done, investors have moved to the sidelines as they wait for the next important catalyst.
Second, Ethereum price is consolidating as the market reflects on the rising volatility in the financial market. The VIX index, which is the best-known volatility benchmark, has risen sharply from the lowest level this year. And some traders believe that it will keep rising as the Federal Reserve has maintained a more hawkish tone.
Third, the blockchain industry has seen significant outflows in the past few months. For one, the volume of NFTs traded in September was about 97% below where it was in January of this year. Similarly, the total value locked in Ethereum has crashed from over $100 billion to less than $50 billion. As such, the fees that Ethereum generates has continued falling.
Most importantly, there are concerns about regulations. The new version of Ethereum introduced the concept of staking, which lets people make money by staking their coins. As a result, there are concerns that ETH has transitioned into a security.
Ethereum price prediction
On the daily chart, we see that the ETH price has been in a consolidation phase in the past few days. In this period, it has remained below the important support level at $1,421, which was the lowest level on August 29. Ether has also crashed below the 25-day and 50-day volume-weighted moving averages (VWMA).
Ethereum price has also formed a double-top pattern. Therefore, there is a likelihood that the coin will have a bearish breakout as sellers target the next reference level at $1,000. A move above the resistance point at $1,450 will invalidate the bearish view. For an updated ETH outlook, consider subscribing to InvestingCube’s S&R indicator, which has an accuracy rate of over 87%.
