Ethereum price stagnates as further drop looks imminent
ETH is currently showcasing a technical pattern referred to as an "ascending triangle" indicating an incoming price drop.
- Ethereum's share of the crypto market has dipped to a 6-month low of 13.8%.
- More than AUD$650M (US$445M) worth of capital has exited the Ethereum ecosystem since the start of the year.
- Experts believe ETH could scale down to a local bottom of AUD$1,200 (US$830) by the end of Q3/2022.
Ethereum's price action has continued to remain shaky, as evidenced by the fact that the currency breached the AUD$1,600 (US$1,100) threshold just a few hours ago before correcting once again. ETH's weekly losses now stand at -8.4% while trading at AUD$1,538 (US$1,049).
ETH's value slipped on the final day of Q2/2022, staying in line with the financial trend exhibited by most risk assets (including tech-heavy indices such as the S&P 500 and Nasdaq 100). Amid existing fears of higher inflation and rising interest rates, this ongoing price action could very well carry into Q3. ETH's value slipped by -4.5% on 30 June, showcasing losses for over 96 hours running.
Ethereum is currently forming an "ascending triangle" pattern, which is a bearish graph signalling a sharp down trend for an asset in the near term. Data suggests that a Q3 bottom target of AUD$1,220 (US$835) may be in play, which is nearly 20% lower than its existing price levels.
Another bearish indicator is that ETH balances across centralised exchanges are on the rise. To this point, approx. 1 million ETH has made its way into various crypto trading platforms since May 2022. As the volume of ETH present across exchange wallets rises, it suggests growing selling pressure.
Even institutional players are reducing their exposure to the digital currency by taking out funds from various ETH-centric investment vehicles. To this point, AUD$200M (US$136.9M) worth of capital has exited the ETH ecosystem all through June, while nearly AUD$659M (US$450M) has left the currency's fund pool since the start of 2022.
Silver lining in sight?
While some investors are offloading their ETH rapidly, crypto analytics provider Santiment has revealed that whale and shark addresses (i.e. wallets holding anywhere between 100 and 100K ETH) have collectively added 1.1% more of the coin's supply to their bags since 7 June.
Smaller investors also seem to be "buying the dip", with addresses holding between 0.1 and 10 ETH having risen significantly since November 2021. Therefore, it will be interesting to see how the digital asset's near-term future pans out.
Disclosure: The author owns a range of cryptocurrencies at the time of writing
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