According to the technical analysis shared by Bloomberg analysts, Ethereum is potentially on its way to the $1,000 threshold for the first time in two months. The main reasons are a potential spike in volatility and a variety of factors hinting at the continuation of the downtrend.
The main thesis of analysts is Ethereum's breakdown below the 50-day moving average, which usually acts as a barrier between bull and bear trends. Unfortunately for Ethereum investors, the second biggest cryptocurrency crossed the line for the second time this year, which shows the complexity of the situation.
In addition to the moving average, analysts use the stochastic indicator, which compares the current price with a certain range in the past and is used for determining the momentum of the market. According to it, Ethereum is going to continue its way down for an undisclosed period of time.
The $1,000 threshold will most likely be reached in the coming days, says the co-founder of Fairlead Strategies. To reach the psychological threshold in the next few days, Ethereum would need to drop another 35% from current values.
How likely is a $1,000 plunge?
Luckily, it is not yet clear what can provide such an enormous selling pressure on Ethereum in just a few days, considering the successful testing of the Merge upgrade and the lack of technical issues.
The last time Ether lost around 40% of its value in just a few days was the UST catastrophe that pushed the market into consolidation for a month. As for now, the industry remains relatively calm despite continuing macroeconomic issues that affect both digital assets and financial markets.
At press time, Ethereum is trading at $1,584.