Ethereum's implosion continues
Investors and traders have been anxiously watching Ether's price in recent days, fearing a decisive breakdown below $1,000 would trigger the forced liquidations of massively leveraged bets. In turn, that would put more downside pressure on Ethereum.
The fears appear due to Babel Finance and Celsius Network, a pair of crypto lending platforms that halted withdrawals citing market volatility.
They intensified further after Three Arrow Capital, a crypto hedge fund managing $10 billion worth of assets as of May, failed to shore up its collateral to cover pungent bets. This came less than a month after Terra, a $40 billion "algorithmic stablecoin" project, collapsed.
These events have coincided with a massive capital withdrawal from Ethereum's blockchain ecosystem. The total value locked (TLV) unwind occurred in two parts. First, Ethereum's TVL across DeFi projects fell by $94 billion after the Terra debacle in May and then by another $30 billion by
med-June
-The deleveraging event that is underway is observably painful, and is akin to a form of mini-financial crisis," noted CheckMate and CryptoVizArt, a pair of analysts at Glassnode, an on-chain analytics platform, adding:
"However, with this pain comes the opportunity to flush excessive out leverage, and allow for a healthier rebuild on the other side."
How low can ETH price go?
Fed's hawkish policies and the ongoing DeFi market implosion suggest extended bearish moves in the Ether market.
From a technical perspective, ETH's price must regain $1,000 as its psychological support, which, if broken to the downside, could have the token eye the $830 as its next target. The same level served as resistance in February 2018, which preceded a 90% decline to around $80 in December 2018.
Meanwhile, as Cointelegraph covered earlier, ETH/USD can fall to as low as $420 if Ether's correction turns out to be anything like its 2018 bear cycle when the drawdown reached over 90%.
Related: 72 of the top 100 coins have fallen 90% or more: Here are the holdouts
Interestingly, the $420-downside target was instrumental as support in April-July 2018 and resistance in August-September 2020.
I do not rule out that Ethereum can go down to $ 200
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Your post was upvoted and resteemed on @crypto.defrag
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit