ETH Price

Ethereum 2.0 stakers face a 36.5% larger loss than ETH spot investors — Report

The Ether losses risk becoming steeper due to unfavorable technical and macroeconomic indicators.

Ethereum investors who staked millions of dollars worth of Ether (ETH) tokens to become validators on its soon-to-launch proof-of-stake (PoS) network are now facing heavy paper losses.

Ether spot traders outperform stakers by 36.5%

In detail, investors have locked a little over 13 million ETH into the so-called Ethereum 2.0 smart contract since it went live in December 2020. However, there is no date when these investors can redeem their tokens alongside the 10% yield.

Interestingly, around 62% of Ether tokens were deposited before the price peaked at around $4,930 in November 2021. Meanwhile, the other 38% were deposited after the record high, according to Glassnode’s latest report.

*Ethereum 2.0 total value staked. Source: Glassnode*

As a result, the total value locked inside the Ethereum 2.0 smart contract peaked at $39.7 billion in November 2021, led by 263,918 network validators. But now, the value has dropped to $14.85 billion as of July 7, despite an additional inflow of 5 million ETH in the last eight months.

Ethereum 2.0 stakers deposited ETH to the network’s PoS contract at an average price of $2,390. So, ETH stakers are now holding an average loss of 55% as a result of ETH’s 75% crash since November 2021, Glassnode noted.

Excerpts from its report:

“If we compare this to the Realized Price for the entire ETH supply, 2.0 stakers are currently shouldering 36.5% larger losses compared to the general Ethereum market.”

*ETH 2.0 total value staked realized price versus market price. Source: Glassnode*

Possible bullish and bearish scenarios

Ether’s bear market has also affected Ethereum 2.0 contract inflows.

Notably, the weekly average of 32 ETH deposits into the Ethereum 2.0 contract has fallen to 122 a day compared to 500 to 1,000 per day in 2021. This suggests investors’ reluctance to lock their ETH holdings away amid a bear market.

*Ethereum 2.0 number of new deposits. Source: Glassnode*

From a technical perspective, investors’ fears seem to be legitimate.

Ether risks undergoing a major breakdown in Q3/2022 since it has been painting a classic continuation pattern called the ascending triangle, as illustrated in the chart below. Therefore, ETH’s price could decline to nearly $800, almost 32% lower than July 7’s price.

*ETH/USD daily price chart featuring ascending triangle setup. Source: TradingView*

Conversely, Ethereum’s switch to PoS is almost near after a successful trial on July 6, as Cointelegraph covered. That could have ETH hold above its interim support of around $1,070, as shown in the chart below.

*ETH/USD weekly price chart. Source: TradingView*

Coupled with an “oversold” relative strength index (RSI) reading (below 30), ETH could rebound toward its 200-week exponential moving average (EMA) (the blue wave) near $1,600. That would mark a 35%-plus rally from Jul’s price.

A similar setup appears in the ETH/BTC instrument, which tracks Ether’s strength against Bitcoin (BTC). Ethereum’s successful switch to PoS could have ETH hold above 0.057 BTC, followed by a move upside toward 0.06 BTC, according to Fibonacci retracement graph levels shown below.

*ETH/BTC weekly price chart. Source: TradingView*

Meanwhile, macro risks remain the main danger for ETH price; namely, the Federal Reserve’s potential 75 basis point rate hike in July.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin price spikes to $20K as whale bought BTC confirms support

Bitcoin bounces to five-day highs while Ethereum rises above the $1,100 mark.

Bitcoin (BTC) rose to clip $20,000 for the first time in five days on July 4 as the Independence Day holiday brought some unexpected gains.

*BTC/USD 1-hour candle chart. Source: Tradingview.com*

$20,000 briefly reappears

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD spiking to $20,085 on the day, its best performance since June 30.

The pair had spent most of the holiday weekend at around $19,000, but the absence of Wall Street trading ultimately proved no obstacle for bulls.

Thinner weekend order books likely exacerbated volatility compared to underlying volumes, but nonetheless, Bitcoin was up 3% on the day at the time of writing.

Not going to zero just yet #BTC pic.twitter.com/8KuliZn0QC

— Material Scientist (@Mtrl_Scientist) July 4, 2022

“Bitcoin has successfully created Bullish Divergence on the Daily Time Frame for the first time since breaking below $20,000,” popular analyst Matthew Hyland noted.

On-chain analytics resource Whalemap meanwhile confirmed that whales buying coins at $19,200 had once again provided support for the market.

Yep https://t.co/0SrIWe72OR

— whalemap (@whale_map) July 4, 2022

As Cointelegraph reported, whales had expressed a keen interest in levels immediately below $20,000, conspicuously not choosing to wait until much-vaunted levels at $16,000 and below appeared.

“Flipping $19.5K is a trigger for Bitcoin,” Cointelegraph contributor Michael van de Poppe added.

Altcoins meanwhile made the most of Bitcoin’s spike, with Ether (ETH) rising almost 6% to pass $1,100.

*ETH/USD 1-hour candle chart. Source: Tradingview.com*

Others in the top ten cryptocurrencies by market cap broadly saw daily gains of around 5%.

Ethereum $1K price support in danger as Q2 comes to a close

The latest ETH plunge has triggered a bearish continuation setup, with an interim downside target 20% below the current prices.

Ethereum’s native token Ether (ETH) fell on the final trading day of Q2/2022, trading in sync with riskier assets amid persistent fears of higher inflation and rising interest rates. And it could result in further declines heading into Q3.

ETH price breakdown underway

ETH’s price plunged nearly 5% this June 30 to $1,044 following a four-day losing streak. The ETH/USD pair has also broken below its interim rising trendline support, which in conjugation with a horizontal trendline resistance to the upside, constitutes an “ascending triangle” pattern.

Ascending triangles are bearish continuation patterns when they occur after a sharp downtrend. Therefore, a breakdown out of an ascending triangle typically results in the price falling further lower, typically by as much as the structure’s maximum height.

Ether had been trending inside an ascending triangle since June 13, breaking below the triangle’s lower trendline on June 29 — a move that accompanied a spike in trading volumes, confirming traders’ conviction about a further downtrend.

As a result, ETH’s downside target in Q3, led by the ascending triangle setup, comes to be near $835, almost 20% lower than June 3’s price.

Exchange reserves are rising

The bearish technical outlook is also boosted by an uptrend in the number of ETH on exchanges.

Notably, investors have deposited around 1 million Ether tokens across all crypto trading platforms since May 2022, according to data from CryptoQuant. As the amount of ETH rises in exchanges’ wallets, it indicates a growing selling pressure in the Ether market.

*Ethereum exchange reserves. Source: CryptoQuant*

Institutional investors have also been limiting their exposure in Ether by withdrawing capital from the dedicated investment funds, CoinShares noted in its weekly report.

Ether-focused investment products have witnessed $136.9 million worth of outflows in June. In 2022 so far, they have processed circa $450 million in withdrawals, confirming that traditional investors are very bearish on ETH.

*Net flow into/out of crypto funds by assets. Source: CoinShares*

ETH sharks and whales buy the dip

On the bright side, the decline in Ether’s prices across June has provided some of its richest investors the opportunity to “buy the dip.”

“Ethereum shark and whale addresses (holding between 100 to 100K $ETH) have collectively added 1.1% more of the coin’s supply to their bags on this -39% dip [since June 7],” noted Santiment, a crypto-focused data analytics platform, adding:

“Historical evidence points to this tier group having alpha on future price movement.”

*Ethereum ‘whale’ holdings. Source: Santiment*

*ETH number of addresses holding 100+ coins. Source: Glassnode.*

Additionally, smaller investors have also been showing a similar dip-buying sentiment , with a consistent increase in addresses holding at least 0.1, 1, and 10 ETH since the end of last year, data from Coinglass shows.

Ether’s price is currently down nearly 75% year-to-date.

Ethereum sell-off resumes with ETH price risking another 25% decline in June

Ether price is forming a bear pennant pattern whose profit target comes to be near $850.

Ethereum’s native token Ether (ETH) slumped on June 16, suggesting that its relief rally, coinciding with the Federal Reserve announcing it will hike the benchmark rate by 0.75%, is at risk.

Ether bulls trapped?

Ether’s price slipped by 9.2% to around $1,120 per token a day after it rebounded by 23% after dropping to almost $1,000, its worst level since January 2021.

The ETH/USD pair’s upside move, followed by a sharp correction, appeared in tandem with U.S. stocks, confirming that it traded like a risk-asset.

*ETH/USD and Nasdaq daily correlation coefficient. Source: TradingView*

The decline means that Ether has shed 77% of its value since November 2021 and is now trading below its “realized price” of $1,740, data from Glassnode shows.

*Ethereum realized price (USD). Source: Glassnode*

In addition, a higher interest rate environment adds more selling pressure, with investors leaving high-risk trades and seeking safety in traditional hedging assets, such as cash.

Investors’ faith in cryptocurrencies has also eroded following the collapse of Terra (originally LUNA, now LUNC), a $40 billion algorithmic stablecoin project, and lending platform Celsius Network’s decision to halt withdrawals.

Atop that, Three Arrow Capital, a crypto hedge fund that oversaw nearly $10 billion in May 2022, reportedly faces insolvency risks. Fears about systemic risks have further limited the crypto market’s recovery bias, hurting Ether.

ALERT: 3AC $250 Million $ETH Position Will Be Liquidated at ≈1000

— Market Meditations (@MrktMeditations) June 15, 2022

From a technical perspective, Ether’s recent gains look like a bear market rally, which could be due to investors covering their short trades.

In detail, investors close their short positions by buying the underlying asset back on the market—typically at a price less than the one at the time of borrowing—and returning them to the lender. That prompts the asset to rally between large downside moves, but it does not signify a bullish reversal.

These minor rallies could be a bull trap for investors that mistakenly see the rebound as a sign of bottoming out.

On the other hand, experienced bears utilize the pump to open new short positions at the local price top, knowing that nothing has fundamentally changed about the market.

ETH “bear pennant” hints at more losses ahead

Ether’s “bear pennant ” on shorter-timeframe charts also supports a bull trap scenario.

Bear pennants are bearish continuation patterns that form as the price consolidates inside a triangle-shaped structure after a strong downside move.

As a rule of technical analysis, traders measure a bear pennant’s profit target by subtracting the breakdow point from the height of the previous decline (called “flagpole”), as shown below.

*ETH/USD four-hour price chart featuring “bear pennant.” Source: TradingView*

This puts the next bear target for ETH price at $850, down almost 25% from June 16’s price.

Ethereum crashed by 94% in 2018 — Will history repeat with ETH price bottoming at $375?

ETH’s latest plunge could bring more pain despite expectations that $1,200 should hold.

Ethereum’s native token Ether (ETH) is showing signs of bottoming out as ETH price bounced off a key support zone. Notably, ETH price is now holding above the key support level of the 200-week simple moving average (SMA) near $1,196.

The 200-week SMA support seems purely psychological, partly due to its ability to serve as bottom levels in the previous Bitcoin bear markets.

Independent market analyst “Bluntz” argues that the curvy level would also serve as a strong price floor for Ether where accumulation is likely.

He notes:

“BTC has bottomed 4x at the 200wma dating back to 2014. [Probably] safe to assume it’s a pretty strong level. Sure we can wick below it, but there [are] also six days left in the week.”

Currently, ETH/USD is almost 75% below its record high, seven months after hitting around $4,950.

This massive correction has made the Ethereum token an “oversold” asset, per its below-30 relative strength (RSI) readings, another technical indicator showing that ETH is a “buy.”

The last time Ether turned oversold was in November 2018, which preceded the end of a 12-month long bear cycle that saw ETH losing 94% of its value.

Unfortunately, the same bearish exhaustion cannot be promised in 2022 as Ether continues facing some serious macro headwinds.

ETH’s technical bull signals are not enough

Ether’s attempt to find a concrete bottom appears against the backdrop of a selling frenzy happening across the crypto and traditional financial markets.

At the core of its 75% price correction is a hawkish Federal Reserve with its possibility of raising interest rates by 175 basis points by September’s end, according to interest rate swaps linked to FOMC policy outcome dates.

*Change in Fed’s interest-rate targets. Source: Bloomberg/CME*

In other words, riskier assets would suffer as lending costs rise. This could hurt Ether’s recovery prospects despite it holding above a so-called “strong” support level.

1-2 months as the Ethereum merge would be implemented between August and October. And traders will front-run it. It won’t matter much if the Fed gets more aggressive, but if it doesn’t, then that’s your catalyst.

— Alex Krüger (@krugermacro) June 2, 2022

Ether price targets

ETH’s price has been testing the 0.786 Fib line (near $1,057) as its interim support. This price level serves is a part of the Fibonacci retracement graph, drawn from the $1,323-swing high to the $82-swing low, as shown in the chart below.

*ETH/USD weekly price chart featuring Fibonacci support/resistance levels. Source: TradingView*

A 2018-like 94% price decline would risk bringing ETH to the 0.236 Fib line near $375, down 70% from June 1’s price.

Conversely, if Ether indeed bottoms out near its 200-week SMA, its path of least resistance appears to be toward $2,000. An extended upside retracement above $2,000 would have the Ethereum token test $3,500 as its next bull target.

BTC price crashes to $20.8K as ‘deadly’ candles liquidate $1.2 billion

Carnage for short-term traders and speculators as volatility destroys both long and short positions on the way to $20,000.

Bitcoin (BTC) came within $1,000 of its previous cycle all-time highs on June 14 as liquidations mounted across crypto markets.

*BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView*

Bitcoin price hits 18-month lows

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting $20,816, on Bitstamp, its lowest since the week of December 14, 2020.

A sell-off that began before the weekend intensified after the June 13 Wall Street opening bell, with Bitcoin and altcoins falling in step with United States equities.

The S&P 500 finished the day down 3.9%, while the Nasdaq Composite Index shed 4.7% ahead of key comments from the U.S. Federal Reserve on its anti-inflation policy.

The worst of the rout was reserved for crypto, however, and with that, BTC/USD lost 22.4% from the start of the week to the time of writing.

The pair was also “uncomfortably close” to crossing the $20,000 mark, trading firm QCP Capital noted, this representing the all-time high from its previous halving cycle, something which had never happened before.

In a circular to Telegram channel subscribers, QCP flagged both the inflation topic and potential insolvency at fintech protocol Celsius as driving the sell-off.

“We have been expressing concern about the collapse of a significant credit player since the LUNA blowup. The market is now panicking about the impact and contagion if Celsius becomes insolvent,” it explained:

“Some key liquidation levels that the market is looking out for are 1,150 in ETH, 0.8 in stETH/ETH and 20,000 in BTC. We are getting uncomfortably close.”

For other analysts, all bets were off when it came to guessing the BTC price floor or whether key trendlines would hold as support.

Deadly red candle, deadly green candle.

— Michaël van de Poppe (@CryptoMichNL) June 13, 2022

Rekt Capital warned that the 200-week simple moving average (SMA) at $22,400 had not been accompanied by significant volume interest, leaving the door open for a test of lower levels.

“BTC has reached the 200-week MA but the volume influx isn’t as strong as in previous Bear Market Bottoms formed at the 200 MA,” he told Twitter followers:

“But downside wicking below the 200 MA occurs & perhaps this wicking needs to occur this time to inspire a strong influx of volume.”

At the time of writing, the 200 SMA appeared to be acting more like resistance than support on low timeframes.

*BTC/USD 1-week candle chart (Bitstamp) with 200 SMA. Source: TradingView*

Altcoin futures index shows full force of retracement

On altcoins, Ether (ETH) fell to 40% below the previous week’s high to near the $1,000 mark.

Should that break, it would be the first time that ETH/USD had traded at three-digit prices since January 2021. As Cointelegraph reported, the pair had already crossed its $1,530 peak from Bitcoin’s previous halving cycle.

Across altcoins, there was little cause for celebration in this downtrend, Rekt Capital argued, highlighting flagging alt presence versus Bitcoin.

Indeed the green HTF support that was lost in May has since turned into new resistance

Altcoin Index has fallen -50% since

The Index has since reached a new Monthly level (orange) which may be showing weakness already

Strongest support is at green down below#Ethereum #Crypto pic.twitter.com/cJlra7EkIq

— Rekt Capital (@rektcapital) June 13, 2022

In a sign of the pain affecting all crypto traders, meanwhile, data from on-chain monitoring resource Coinglass confirmed cross-market liquidations passing $1.2 billion in just 24 hours.

*Crypto liquidations chart. Source: Coinglass*

Ethereum price flash crashes to $950 on Uniswap as whale dumps 93K ETH

ETH managed a sharp rebound after falling to $950. But the ETH/USD bearish continuation setup could have it revisit it.

Ethereum’s native token Ether (ETH) fell to as low as $950 on Uniswap—a decentralized crypto exchange— this June 13, about 20% lower than its spot rate across other exchanges.

*ETH/USD hourly price chart. Source: Uniswap*

Over $130M ETH sold in six hours

The incident happened at around 3:00 am UTC after a whale dumped 65,000 ETH for multiple “stablecoins,” including USD Coin (USDC), Tether (USDT) and Dai (DAI).

A piece of evidence noted that the whale sold its ETH holdings to pay off nearly $73 million worth of debt at Oasis.app, a DeFi lending platform. The duration of the sell-off saw ETH’s liquidation price dropping from $1,200 to $875.

not a liquidation, someone selling collateral to pay off debthttps://t.co/tceIla0xuF pic.twitter.com/KwIholu1St

— mariano.eth ✨ᕙ༼ຈل͜ຈ༽ᕗ✨ | (@nanexcool) June 13, 2022

The Oasis borrower continued the selling spree—dumping another stash of nearly 28,000 ETH five hours after the first selloff—to pay back another $32 million in debt. This time, the liquidation price rose from $892 to $1,200, as shown below.

*Screenshot of the anonymous borrower’s dashboard. Source: Oasis.app*

As a result, the whale dumped around 93,000 ETH within just six hours. The amount equals toroughly $112 million at June 13’s ETH/USD price.

Interestingly, the Oasis borrower’s total outstanding debt was about $120 million (as measured in DAI stablecoin), suggesting that the whale suffered heavy “slippage” losses.

wtf… was this a misclick? https://t.co/POURtN4F6s

— Jonathan Howard (@staringispolite) June 13, 2022

Ether price eyes $667 — veteran analyst

Ether’s trip to $950 was brief, suggesting adequate demand for the tokens near the level. Nonetheless, one separate analysis from veteran trader Peter Brandt pointed at ETH’s price falling toward $650 in the coming weeks.

Brandt’s bearish outlook emerged out of a classic continuation pattern, dubbed the “descending triangle,” which resolves after the price breaks out in the direction of its previous trend.

Since Ether was falling before the triangle’s formation, its path of least resistance was skewed to the downside.

*ETH/USD daily price chart. Source: Peter Brandt/TradeNavigator*

Brandt says that ETH had reached the triangle’s first downside target of $1,268 as the price declined 20% on June 13. He anticipates the declines to continue, with ETH dropping almost by another 50% to $667.

Nonetheless, Ether’s oversold relative strength index (RSI) could lead to a sharp price reversal. Ethereum picks additional rebound cues from its 200-week simple moving average (200-week SMA; the orange wave in the chart below) near $1,200, now serving as support.

If ETH price undergoes an upside retracement, then the token’s interim bull target could be near $1,450, coinciding with the 1.00 Fib line of the Fibonacci retracement graph drawn from around $1,450-swing high to the $84-swing low.

Conversely, a decisive close below the 200-week SMA could have ETH eye $920 as its next downside target.

Ethereum price enters ‘oversold’ zone for the first time since November 2018

Ether’s price rebounded by nearly 400% after its RSI turned oversold the last time. Will this time be different?

Ethereum’s native token Ether (ETH) entered its “oversold” territory this June 12, for the first time since November 2018, according to its weekly relative strength index (RSI).

This is the last time $ETH went oversold on the weekly (hasn’t confirmed here yet).

I had no followers, but macro bottom ticked it.

Note, you can push way lower on weekly rsi, not trying to catch a bottom. https://t.co/kLCynTKTcS

— The Wolf Of All Streets (@scottmelker) June 12, 2022

ETH eyes oversold bounce

Traditional analysts consider an asset to be excessively sold after its RSI reading fall below 30. Furthermore, they also see the drop as an opportunity to “buy the dip,” believing an oversold signal would lead to a trend reversal.

Ether’s previous oversold reading appeared in the week ending on Nov. 12, 2018, which preceded a roughly 400% price rally, as shown below.

*ETH/USD weekly price chart featuring oversold RSI. Source: TradingView*

While past performances are not indicators of future trends, the latest RSI’s move below 30 raises the possibility of Ether undergoing a similar—if not an equally sharp—upside retracement in the future.

Suppose ETH logs an oversold bounce. Then, the ETH/USD pair’s immediate challenge would be to reclaim its 200-week exponential moving average (200-week EMA; the blue wave) near $1,620 as its support.

If it does, bulls could eye an extended upside move towards the 50-week EMA (the red wave) above $2,700, up almost 100% from today’s price.

If not, Ether could resume its downtrend, with $1,120 serving as the next target, a level coinciding with the token’s 0.782 Fib line, as shown in the chart below.

*ETH/USD weekly price chart featuring Fibonacci support and resistance levels. Source: TradingView*

Macro headwinds and a $650 Ether price target

The RSI-based bullish outlook appears against a flurry of bearish headwinds, ranging from persistently higher inflation to a classic technical indicator with a downward bias.

In detail, Ether’s price decline by more than 20% in the last six days, with most losses coming after June 10, when the U.S. Labour Department reported that the inflation reached 8.6% in May, the highest since December 1981.

The higher consumer price index (CPI) strengthened fears among investors that it would force the Federal Reserve to hike interest rates more aggressively while slashing its $9 trillion balance sheet. That dampened appetite for riskier assets, hurting stocks, Bitcoin (BTC) and ETH.

*ETH/USD versus SPX and BTC/USD daily price chart. Source: TradingView*

Independent analyst Vince Prince fears the latest ETH decline could extend until the price reaches $650. At the core of his downside target is a massive “head and shoulders” — a classic bearish reversal pattern with an 85% success rate in meeting its profit target, according to Samurai Trading Academy.

The massive head-and-shoulder formation forecasted earlier for #Ethereum has now been completely confirmed…

… $ETH is now headed towards the $650 USDT area!!! pic.twitter.com/R2KaqiorEd

— Vince Prince (@Vince_Prince_) June 12, 2022

Meanwhile, Glassnode’s lead on-chain analyst, known by the pseudonym “Checkmate,” highlighted a potential DeFi disaster that could crash Ether’s price further into 2022.

The analyst noted that the ratio between Ethereum’s and the top three stablecoins’ market capitalization grew to 80% on June 11.

Ratio is now at 80%

Market Cap of:#Ethereum = $181.58B
Top 3 Stablecoins = $144.28B
TVL in DeFi = $101.67B$ETH at $1215 makes for equal Ethereum and Top 3 stablecoin market caps.

The principle risk here is levered $ETH collateral in DeFi loans getting liquidated in a cascade https://t.co/26u0vXnMMY pic.twitter.com/q555clRaap

— _Checkɱate ⚡ (@_Checkmatey_) June 12, 2022

Since “most people borrow stablecoins” by providing ETH as collateral, the potential of the Ethereum network becoming less valuable than the top dollar-pegged tokens would make the debt’s value higher than the collateral itself.

Checkmate noted:

“There is nuance as not all stablecoins are borrowed, and also not all are ON ethereum. But nevertheless, the risk of liquidations [is] a hell of a lot higher than it was three months ago.”

Ethereum price enters ‘oversold’ zone for the first time since November 2018

Ether’s price rebounded by nearly 400% after its RSI turned oversold the last time. Will this time be different?

Ethereum’s native token Ether (ETH) entered its “oversold” territory this June 12, for the first time since November 2018, according to its weekly relative strength index (RSI).

This is the last time $ETH went oversold on the weekly (hasn’t confirmed here yet).

I had no followers, but macro bottom ticked it.

Note, you can push way lower on weekly rsi, not trying to catch a bottom. https://t.co/kLCynTKTcS

— The Wolf Of All Streets (@scottmelker) June 12, 2022

ETH eyes oversold bounce

Traditional analysts consider an asset to be excessively sold after its RSI reading fall below 30. Furthermore, they also see the drop as an opportunity to buy the dip, believing an oversold signal would lead to a trend reversal.

Ether’s previous oversold reading appeared in the week ending on Nov. 12, 2018, which preceded a roughly 400% price rally, as shown below.

Suppose ETH logs an oversold bounce . Then, the ETH/USD pair’s immediate challenge would be to reclaim its 200-week exponential moving average (200-week EMA; the blue wave) near $1,620 as its support.

If it does, bulls could eye an extended upside move toward the 50-week EMA (the red wave) above $2,700, up almost 100% from the price of June 12.

If not, Ether could resume its downtrend, with $1,120 serving as the next target, a level coinciding with the token’s 0.782 Fib line, as shown in the chart below.

Macro headwinds and a $650 Ether price target

The RSI-based bullish outlook appears against a flurry of bearish headwinds, ranging from persistently higher inflation to a classic technical indicator with a downward bias.

In detail, Ether’s price declined by more than 20% in the last six days, with most losses coming after June 10, when the United States Labor Department reported that the inflation reached 8.6% in May, the highest since December 1981.

Independent analyst Vince Prince fears the latest ETH decline could extend until the price reaches $650. At the core of his downside target is a massive head and shoulders — a classic bearish reversal pattern with an 85% success rate in meeting its profit target, according to Samurai Trading Academy.

The massive head-and-shoulder formation forecasted earlier for #Ethereum has now been completely confirmed…

… $ETH is now headed towards the $650 USDT area!!! pic.twitter.com/R2KaqiorEd

— Vince Prince (@Vince_Prince_) June 12, 2022

Meanwhile, Glassnode’s lead on-chain analyst, known by the pseudonym Checkmate, highlighted a potential decentralized finance (DeFi) disaster that could crash Ether’s price further into 2022.

The analyst noted that the ratio between Ethereum’s and the top three stablecoins’ market capitalization grew to 80% on June 11.

Ratio is now at 80%

Market Cap of:#Ethereum = $181.58B
Top 3 Stablecoins = $144.28B
TVL in DeFi = $101.67B$ETH at $1215 makes for equal Ethereum and Top 3 stablecoin market caps.

The principle risk here is levered $ETH collateral in DeFi loans getting liquidated in a cascade https://t.co/26u0vXnMMY pic.twitter.com/q555clRaap

— _Checkɱate ⚡ (@_Checkmatey_) June 12, 2022

Checkmate noted:

“There is nuance as not all stablecoins are borrowed, and also not all are ON ethereum. But nevertheless, the risk of liquidations [is] a hell of a lot higher than it was three months ago.”

Ethereum eyes fresh yearly lows vs. Bitcoin as bulls snub successful ‘Merge’ rehearsal

ETH price could drop by another 25% this month, a mix of technical and fundamental indicators suggest.

Ethereum’s native token Ether (ETH) resumed its decline against Bitcoin (BTC) two days after a successful rehearsal of its proof-of-stake (PoS) algorithm on its longest-running testnet “Ropsten.”

The ETH/BTC fell by 2.5% to 0.0586 on June 10. The pair’s downside move came as a part of a correction that had started a day before when it reached a local peak of 0.0598, hinting at weaker bullish sentiment despite the optimistic “Merge” update.

*ETH/BTC four-hour price chart. Source: TradingView*

Interestingly, the selloff occurred near ETH/BTC’s 50-4H exponential moving average (50-4H EMA; the red wave) around 0.06. This technical resistance has been capping the pair’s bullish attempts since May 12, as shown in the chart above.

Staked Ether behind ETH/BTC’s weakness?

Ethereum’s strong bearish technicals appeared to have overpowered its PoS testnet breakthrough. And the ongoing imbalance between Ether and its supposedly-pegged token Staked Ether (stETH) could be the reason behind it, according to Delphi Digital.

“Testnet Merge was a success, yet the ETH market did not react,” the crypto research firm wrote, adding:

“Concerns over the ETH-stETH link are swirling as the health of financial institutions post-Terra is questioned.”

Several DeFi platforms that have staked Ether in Ethereum’s PoS smart contract will not be able to access their funds if the Merge gets delayed. Thus, they risk running into ETH liquidation troubles as they attempt to pay back their stakeholders.

That could prompt these DeFi platforms to sell their existing stETH holdings for ETH. Meanwhile, if they run out of stETH, the selloff pressure risks shifting to their other holdings, including ETH.

If Swissborg tried to exit their entire stETH position, they would bump the peg down another cent.

More importantly, this would consume 25% of the remaining ETH liquidity in the pool. Swissborg also contributes a few thousand Eth to this pool… 6/ pic.twitter.com/sWIdzMWNvU

— Dirty Bubble Media: ⏰ (@MikeBurgersburg) June 8, 2022

More downside for Ether price?

From a technical standpoint, Ether’s latest decline against Bitcoin pushed ETH/BTC below a multi-month support level around 0.0589, thus exposing the pair to further correction in June, followed by Q3/2022.

The now-broken support level coincides with the 0.382 Fib line of the Fibonacci retracement graph, as shown in the chart below. If ETH/BTC’s correction extends, the pair’s next downside target comes to be around the 0.5 Fib line of the same graph — around 0.0509, a new 2022 low.

Interestingly, the 0.0509-level is near ETH/BTC’s 200-week exponential moving average (200-week EMA; the blue wave) and its multi-year ascending trendline support. Together, this support confluence could be where ETH/BTC exhausts its bearish cycle, allowing the pair to eye 0.0589 as its interim rebound target.

Conversely, a further break below the confluence could prompt Ether to watch 0.043 BTC (near the 0.618 Fib line) as its next downside target, down almost 25% from June 10’s price.