The world’s largest smart-contract-enabled layer 1 blockchain, , has been experiencing a slight recovery this week, with its cryptocurrency Ether (ETH) trading around the $1,610 mark as of Wednesday, September 13, 2023. This represents an increase of approximately 5% from earlier weekly lows in the $1,530s. The crypto markets have been recovering after concerns over FTX’s plans to sell $3.4 billion in digital assets earlier this week. Jeff Dorman, CIO of digital asset investment firm Arca, commented on Tuesday that the market reaction to potential FTX sales was an overreaction.
Despite the recent recovery, some analysts are predicting a possible decline for ETH. In a video, crypto analyst Nicholas Merten told his YouTube subscribers that Ethereum’s inability to move above the resistance of a bullish formation suggests that ETH could be headed for lower levels. He suggested that if Ethereum does not catch a bid soon, it could revisit previous support ranges around $1,100 or even drop to $890 as seen in June.
Furthermore, crypto strategist Benjamin Cowen previously mentioned that ETH could potentially nosedive to as low as $400. He stated that there is a good chance for a lower low and it might not be much lower but could go down to just below $800 or even lower.
However, despite the bearish predictions, there are still positive developments around Ethereum. Future ETF approvals for Ether in the US are expected in the coming months with spot ETF approvals likely next year. Additionally, Ethereum continues to avoid being labeled as a security by the US SEC unlike some of its major rivals like BNB, SOL and ADA.
In terms of technical analysis, Ether remains below its 21-day moving average (21DMA), which has been offering strong resistance recently. It is also below a downtrend that began in August. The formation of a bearish descending triangle structure indicates a possible drop to sub-$1,500 levels.
On the other hand, Ethereum is set to undergo major network upgrades to address scalability concerns in the coming quarters, which could boost its use case. Additionally, more ETH are being removed from supply due to its token burn mechanism and ETH staking gains ground. These factors could potentially support Ethereum’s value in the long term, despite short-term bearish predictions.
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