Ethereum, the second-largest cryptocurrency by market capitalization, has remained steady at $1,500, with support provided by the 200-day Exponential Moving Average (EMA) on the daily chart. However, the market remains in a precarious position, with experts predicting a potential drop in price as investors withdraw their tokens before the upcoming Shanghai hard fork. This article dissects Ethereum’s short-term technical outlook and potential price movements in the coming weeks.
The Impact of the Shanghai Hard Fork:
Investors who locked their ETH in the Beacon Chain smart contract to help the network transition from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus algorithm are expected to withdraw their tokens when the Shanghai hard fork comes in early April. Analysts appear conflicted over the impact of the much-awaited upgrade, with some predicting a potential surge in price above $2,000 while others foresee a further drop in price as stakers gain access to their ETH locked in the smart contract and start to sell.
Ethereum’s Price and the Crypto Market:
The cryptocurrency market remains in a precarious position, with bearish forces likely to be in control as investors choose fixed-income products and the strengthening US dollar over other assets. Federal Reserve Chair Jerome Powell’s recent warning of a looming recession has further dampened market sentiment. US regulatory agencies have also vowed to increase oversight of the industry following the sudden collapse of FTX exchange in November, leaving US-based crypto firms feeling the pressure.
Short-Term Technical Outlook:
The price of ETH is currently facing challenges due to low liquidity and strong selling pressure at $1,569, which is reinforced by an upward trendline. The market is currently controlled by sellers, and it remains to be seen when this will change. The MACD’s recent slide beneath the mean line at 0.00 hints at bears having the upper hand, with support at the 200-day EMA critical to protect. Otherwise, Ethereum’s price could drop to $1,400. According to blockchain data presented by IntoTheBlock, around 18.69 million ETH addresses are currently at a loss, with retail investors potentially opting to sell their crypto assets and switch to better-performing assets, even if it means taking a loss.
Potential Price Movements:
The large circle between $1,600 and $1,647 is where sellers are most concentrated, and where bulls may face resistance as they push for an uptrend. If this area is overcome, ETH price could quickly rally up to $1,800 and $2,000. Traders looking to book long positions in ETH may want to wait until it consolidates at support and prepares for a leg up. The market remains uncertain, with potential price movements in either direction, but the long-term outlook for Ethereum remains positive, with the cryptocurrency expected to benefit from increasing institutional adoption and its usefulness in the DeFi space.
In conclusion, Ethereum’s price remains uncertain in the short term, with potential price movements in either direction. The upcoming Shanghai hard fork and increasing regulatory oversight may further dampen market sentiment, with investors potentially opting to sell their crypto assets. However, the long-term outlook for Ethereum remains positive, with the cryptocurrency expected to benefit from increasing institutional adoption and its usefulness in the DeFi space.