Ethereum Price Prediction as $210 Million Gets Liquidated in Market Volatility – Where is ETH Heading Now?
Major cryptocurrency prices have tumbled on Friday, amid jitters about the health of crypto bank Silvergate, which has seen a rapid exodus of major customers in the last few days. Bitcoin (BTC) was last trading in the mid-$22,000s, down around 4.5% on the day. Ether (ETH), the token that powers the Ethereum blockchain, was last down around 4.7% on the day and trading in the upper-$1,500s. Total cryptocurrency market capitalization was last around $986 billion, down a little over 4.4% or around $43 billion on the day.
The drop in prices has resulted in a surge in trader liquidations. According to crypto derivatives data analytics website coinglass.com, long positions in the crypto futures market worth over $210 million were closed on the 2nd of March. That’s the highest in nearly one month.
Some analysts said that the release of some of Mt Gox’s bitcoin to victims of the exchange’s hack many years ago may have added to the sell pressure. Either way, Bitcoin is now more than 11% below its recent highs above $25,000, whilst Ethereum is closer to 10% down from its recent highs in the mid-$1,700s. Crypto seems to have been playing catch up with recent downside in US equities as a result of concerns about additional interest rate tightening from the Fed in wake of recent strong data.
Can a Stock Rally Underpin Crypto?
In fairness, US stock prices are surging this Friday, which is helping put a floor under crypto prices, but the major indices still remain a long way below recent highs. Macro analysts said traders have become more optimistic on Friday because the Fed hasn’t been giving an indication they want to take interest rates above 5.5%, the level currently priced in by the market. Meanwhile, robust data, including the latest monthly ISM services report, lowers the risk of a US recession later this year.
If the US stock rally can continue, this bodes well for equities. And continue it might, according to positive recent technical developments for the S&P 500. The index recently found strong support at its 200-Day Simple Moving Average (SMA) and a key long-term downtrend, indicating the bull the positive run since last year’s low may yet have further legs to run.
Price Prediction – Where Next for ETH?
Positive momentum in stocks could well act as a tailwind for Ether in the coming days and weeks. So could upcoming upgrades to the Ethereum network. Later this month, the final major public Ethereum testnet will go through the Shapella hard fork, setting the stage for an upgrade to the mainnet next month. The main feature of the coming upgrade is that staked ETH withdrawals will finally be allowed.
While some think this may result in some short-term sell pressure as ETH investors cash in on their withdrawn ETH and ETH earnings, most suspect it will be a long-term positive driver. Flexible withdrawals should attract more ETH investors towards staking, which should result in a greater proportion of the supply getting locked up, which could boost scarcity and prices.
These drivers might be able to lift Ether in the coming weeks, but in the immediate future, the risk of further sell pressure remains. That’s because Ether’s latest drop has seen it break to the south of an uptrend that had been in play since the start of the year. Near-term risks remain tilted towards a potential test of February lows in the $1,460 area.
ETH Alternatives to Consider
ETH could do well in the months ahead. However, traders looking for quick gains might want to consider other high-potential tokens, such as those being sold in pre-sale by promising up-and-coming crypto projects. We’ve reviewed some of the best candidates in this list of the top 15 cryptocurrencies for 2023, as analyzed by the Cryptonews Industry Talk team.
The list is updated weekly with new altcoins and ICO projects.
Disclaimer: The Industry Talk section features insights by crypto industry players and is not a part of the editorial content of Cryptonews.com.