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Ethereum price threatens to drop to $2K on ‘bear flag’ setup



Ethereum’s native token Ether (ETH) will extend its 30% drop this year to its lowest price level since July 2021, if a textbook technical indicator comes out. 24, 2022, only to recover sharply to $2,724 days later. However, this created a so-called “bear flag” chart pattern that suggests the price could fall as low as $2,000 or a 17% drop from its current level. moves further down after breaking the upward range. By doing this, the price tends to fall as much as the length of the previous decline, called “flagpole”. ETH/USD daily price chart with bear flag setup. Source: TradingView In the case of Ether, the flagpole height is over $850. That roughly shifts its price target toward $2,000. Earlier this year, another bear flag formation had led to a similar decline, as shown in the chart above. Rate Increases Ahead The prospect of Ether reaching $2,000 in the coming months is escalating further due to Bitcoin (BTC) and its vulnerability to macroeconomic trends. , the positive correlation efficiency between the Ethereum token and Bitcoin has been 0.92 for the past 30 days, according to data from CryptoWatch. In other words, Ether tracked BTC price trends with 92% accuracy in January 2022. Bitcoin’s correlation with altcoins over the past 30 days. Source: CryptoWatch At the heart of the bearish outlook mentioned is the Federal Reserve’s moderate policy. In detail, the Federal Reserve’s decision to completely withdraw its $120 billion-a-month stimulus program against Covid-19 in early March and raise benchmark rates from their near-zero levels began to shake so-called pandemic winners, including technology stocks. harm , gold and Bitcoin. Paul Krugman, a Nobel Prize-winning economist and long-standing skeptic of cryptocurrencies, foresaw a Bitcoin price crash in 2022, noting that it had “disturbing echoes of the subprime crash” during the 2008 economic crisis. “If you ask me, regulators have made the same mistake they made with subprime: they failed to protect the public from financial products that no one understood, and many vulnerable families will end up paying the price,” he warned. $2,000 first for ETH price? As Ether looks bearish in the shadow of Bitcoin, many analysts expect the Ethereum token to resume its climb later in 2022, due to its involvement in the emerging decentralized financial (DeFi) and nonfungible token (NFT) sectors. For example, billionaire investor Mark Cuban noted last year that Ether could outperform Bitcoin in terms of growth. I like it more because I can see an unlimited number of applications that will change the biz/consumer world forever. And to use them you have to buy Eth/L2. BTC does not have that question. Mark Cuban (@mcuban) October 17, 2021 Mike McGlone, senior commodities strategist at Bloomberg Intelligence, predicted that Ether would reach $5,000 by 2022, despite the Fed’s tapering policy. The veteran analyst called the central bank’s rate hike plans a “win-win scenario” for Bitcoin and Ether against four decades of high inflation in the US. Related: Ethereum Hash Rate Scores New ATH While PoS Migration Is Underway. before continuing his move higher. Notably, “A top force to stop central bank reluctance is a stock market decline, impacting cryptos […] Price supports leaving about $30,000 for Bitcoin and $2,000 for Ethereum in 2021 seem solid. “The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. You should do your own research when making a decision.
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