(MENAFN- Daily Forex) Ethereum has fallen again on Friday, as it looks like we are testing the $1400 level. During the Thursday session, the long-awaited “Merge” finally happened, and Ethereum celebrated by dropping 10%. I've been wanting for a while that this was not something that was going to send the market straight up in the air and that it was more likely than not going to be a“sell the news” type of event. We are now down about 13% from that event.
No matter how you look at it, and no matter what you think the future is going to be, Ethereum is a risk asset. It needs a“risk on environment” to rally significantly. Yes, we recently had rallied from a steep drop to the $900 level, but a lot of that had to do with the excitement building up to“The Merge.” Now that it has been accomplished, there's not a lot going on. In fact, something that is particularly distressing is that most of all transactions processed after this merge are being done by just 2 nodes! There goes the idea of decentralization, at least for now. Looking to Buy the Dip
- Nonetheless, I do think that Ethereum has a future. However, I like the idea of buying it at much lower levels. I think that if we get some type of acceleration in risk aversion, Ethereum and Bitcoin are both going to get slaughtered.
- I think this bear market is nowhere near being over, as the US dollar is like a wrecking ball for everything it gets near.
- Remember, crypto is priced in US dollars, even though it is in theory supposed to be outside of that world.
- In fact, in a twist of irony, crypto markets desperately need the Federal Reserve to start loosening monetary policy to really get things going in the Ethereum and Bitcoin markets.
The $1200 level underneath could be the next target, followed by the $900 level. If we break there, then Ethereum will find its way down to $400 given enough time. I still think this is very possible, although it may take a while to get down there. Once we get anywhere near that level, I am more than willing to start building up a bigger position over time, as I think we could see a nice investing opportunity after a washout.
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