Retail traders with long ETH positions are having a bad week. On Tuesday, the asset gained nearly 6% following the US CPI report.
However, it was rejected at $1,350 and failed to hold on to the new $1,280 support level, judging by the quick price correction that started on Wednesday. Many experts are concerned with the decline of the coin right before Christmas.
The rejection at this level is a factor that contributes to the overall opinion that Ethereum is still lacking something substantial to show after the weak reaction of the market to the merger.
Many point out that the merge is still not finalized until March, when the next upgrade will be released and should prop up the token.
The 48-hour fall infuses traders with anxiety
ETH lost 1.5% in just a couple of hours on Thursday. The overall decline since the local high on Wednesday is about 4.9%, meaning that the market is feeling the pressure and wants to correct the price as quickly as possible.
The bull rally was an unrealistic expectation. The short-term future of the crypto industry is quite hard to predict. It is possible that we have to brace for the worst before the next bull run can occur.
With some people putting BTC’s bottom at $10K and the general relativity of BTC and ETH, we may see ETH bottoming out at $650. It is quite close to the worst-case scenario described by Benjamin Cowen ahead of the Ethereum merge.
Mr. Cowen said that the bottom for ETH can be closer to $400 and that it is possible that the asset will have reached it by the end of the year. With some help from forces outside of our control, this scenario looks like something probable.
Should we all start panicking?
Despite what many people are saying about Ethereum, it has the necessary foundation in its technology. It won’t fall, and the likelihood of it falling to $650, losing over 47% of its current value, sounds preposterous.
However, being careful and thinking about putting some of your eggs in the Cardano and Bitgert baskets can be a good idea.