Dead Cat Bounce Or A Recovery?

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The Ethereum price dipped to the lows of $1700 last week as the cryp­to mar­kets faced an unprece­dent­ed sell-off. Most cryp­tocur­ren­cies includ­ing Bit­coin have made fresh 52 week lows. The ongo­ing slump in tra­di­tion­al mar­kets in gen­er­al and tech stocks, in par­tic­u­lar, has sent a rip­ple effect in cryp­to mar­kets. While cryp­tocur­ren­cies are eying a relief ral­ly, many ana­lysts believe that the worst is yet to come. There­fore, all the bull­ish Ethereum price pre­dic­tions seem to be hang­ing by a thread.

At the time of writ­ing, Ethereum price USD is $2040 which is 57% below its Novem­ber 2021 ATH. This depre­ci­a­tion in price has quite adverse­ly affect­ed its ecosys­tem as well.  Most Ethereum based tokens are trad­ing at just a frac­tion of their 2021 all-time highs. Although ETH is up 24% from last week’s lows, still many investors are con­sid­er­ing the cur­rent ral­ly a dead cat bounce.

As per the Ethereum news today, the much-antic­i­pat­ed merge is expect­ed to be rolled out by Q3/Q4 2022. This upgrade would ini­ti­ate the tran­si­tion of the Ethereum blockchain from proof-of-work con­sen­sus to proof-of-stake. This would be a major mile­stone in the devel­op­ment of Ethereum 2.0. Many hold­ers are con­fi­dent that this merge could trig­ger anoth­er bull run for the Ethereum ecosystem.

Ethereum Price Prediction

Tech­ni­cal analy­sis of the Ethereum price chart sug­gests that the price is form­ing a bear flag on the 4H chart. This bear flag could poten­tial­ly plum­met the price to as low as the $1400 lev­el. How­ev­er, there seems to be strong sup­port around $1700-$1800 and anoth­er bounce from that lev­el might give some hope to the bulls.

Any bull­ish Ethereum price pre­dic­tion stands to be inval­i­dat­ed at this point due to the change in mar­ket struc­ture. Any relief ral­ly could be con­sid­ered a dead cat bounce as long as the price stays below $2500. The next dip might present a decent buy­ing oppor­tu­ni­ty before the upcom­ing merge with Ethereum 2.0. How­ev­er, the past tells us that such his­toric mile­stones might also turn out to be ‘sell the news’ events. There­fore, any Ethereum invest­ment before the recov­ery in Bit­coin prices is a high risk at this point.

ETH USD Price Technical Analysis

Ethereum Price Analysis



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