The crypto market remains in correction mode. After prices moved sideways for days, the start of the week was far from pleasing for buyers of Ethereum, Bitcoin and other cryptocurrencies.
Among the big losses is also the most important altcoin by market capitalization. The ETH / USD price is trading at around $ 1,750 at the time of publication. As recently as last weekend, Ethereum had scratched the $ 2,000 mark and has since experienced a strong sell-off.
ETH / USD Slides 60 percent since May
In the past 24 hours alone, prices have fallen by more than six percent. Over the past trading week is even a minus of more than 13 percent to book. However, it is particularly bad for investors who bought Ethereum at its highs in May.
Against the all-time record of nearly $ 4,400 set on May 12, ETH / USD has plummeted by more than 60 percent in just ten weeks. A massive drop in value that investors have not experienced for a long time. Comparable fixes were last seen during the Corona crash in March 2020, when the altcoin crashed from $ 280 to $ 120. A decrease from then 57 percent.
However, the correction at the time was due to a so-called “Black Swan Event”. Thus, the corona pandemic hit the financial markets unexpectedly and with full force at that time and led to significant losses not only for investors in the crypto market, but also for buyers of shares, for example.
Memories of the bear market 2018 are awakened
The current situation is not at all comparable to the circumstances of that time. Although the corona pandemic is far from defeated, but the crisis has long been factored in by the markets. In addition, encouraging news, such as the rapid development of effective vaccines, contributed to the fact that the financial markets experienced a historic rally last year, in which new all-time records were achieved for both Bitcoin & Co.but also on the stock markets in the USA and Europe.
The current price performance of Ethereum must therefore be compared rather with the correction that was initiated in January 2018. At that time, the crypto market had experienced a comparable bull run as in 2020/2021, setting new records. The Bitcoin price skyrocketed to almost $ 20,000, and Ethereum reached the $ 1,420 mark.
Can Ethereum fall 94 percent again?
An unprecedented increase at the time, because a year earlier, in December 2016, ETH/USD was still available for $ 6 per token. This bull market has strong parallels with the development of 2020/2021. From its low point at $ 120 in March 2020, the altcoin in the top has seen growth of 3.567 percent. At that time, ETH/USD even reached a price increase of 23,657 percent in the bull market in 2017/2018.
But apparently – as then – the steep climb is now followed by a steep correction. From January 13, 2018 to December 14, 2018, ETH/USD fell by more than 94 percent. This bear market dragged on for almost a year.
The current correction of around 60 percent is significantly lower in comparison. However, investors must bear in mind that the bear market started just over two months ago. If the correction continues for a few more months, it is quite possible that in the end there will also be declines of more than 90 percent.
What would that mean for the price? With a 94 percent drop from the May 2021 record, ETH/USD would crash to around $ 260. However, there is much to suggest that Ethereum will not reach this low price level.
Crypto Market 2021 Not Comparable to 2018
Because since the past bull market, the fundamental data for the crypto market has improved significantly. While the bull market in 2017 was still driven by speculators who quickly sensed the big money, the current bull cycle was characterized by the entry of institutional investors such as Tesla, Square or MicroStrategy. In addition, there were bullish news such as the integration of cryptocurrencies with the global payment service provider PayPal.
So the foundation on which the crypto market stands has changed significantly compared to then. Crypto assets like Ethereum are no longer just the plaything of speculators, but are valued by professional investors as inflation protection, as digital gold. Accordingly, despite the current wave of corrections, the companies mentioned continue to hold on to their investments, as far as this has been communicated at least in public.
Correction more moderate than in 2018
The course of correction in recent weeks also shows clear differences from 2018, which could be related to the changed market structure. For example, in early 2018, ETH/USD formed a strong spike in the price and fell down like a landslide. This time, the correction has been slower and so far more “gentle”. However, this can be seen especially in the Bitcoin chart. Here, the current correction is more in the form of a crown, and not a sharp tip, as in 2017/2018.
That’s not to say, however, that the Ethereum price might not fall further in a prolonged bear market. However, there are strong support zones on the way down, from which sooner or later a rebound to the top could take place.
From $ 1,700, ETH / USD could rise to $ 3,100
The next support that ETH / USD could hit is already at $ 1,700. From this, the course is only a short distance away. On June 22, the altcoin had already tested this brand and then experienced a strong rebound to the top. In the following period, the price could quickly rise again to up to $ 2,400.
Should ETH / USD actually find support already here, a so-called double bottom pattern could form in a bullish scenario. This double bottom describes a course level that is tested at two points in time. There is a higher neck line between these two points in time.
If this scenario is to happen, ETH / USD must meet two conditions:
- The price must not fall below $ 1,700
- The following increase will have to break through the neck line in the area of $ 2,411
If successful, the technical price target of ETH / USD is around 3,100 dollars and thus at a level that was last achieved in mid-May. For traders in this case, there would be a very nice trading opportunity on a crypto exchange like Binance.
Next stop at $ 1,420
However, if the bearish scenario occurs and ETH/USD falls below $ 1,700, the next strong support zone is only waiting in the $ 1,420 range. Because here is a psychologically very important brand for the course. It is the all-time high from the past bull market of January 2018. At the latest, a bounce in the price is therefore expected.
Based on the fundamentals, there is some evidence that the Ethereum price could find a hold here. The mark is comparable to the $ 20,000 for the Bitcoin rate from the past bull market. Should ETH / USD actually find a bottom here, there could be a very good chance for investors to buy or repurchase Ethereum cheaply.
Already the next few days could become decisive for the Ethereum trend.