Ether (ETH) has been in a downward trend since mid-autumnr 2021, and the price has gallen to levels not seen since November 2020.
But where is the price of ETH going next, in the third quarter of 2022?
The crypto market saw modestly higher prices at the beginning of this trading week, despite warnings from analysts that the market could fall further, and traders are looking for an attractive bottom level to enter. Today, Crypto Lists will discuss Ether price estimates from a technical and fundamental analysis perspective. Please note that there are also many other factors to consider when entering a position, such as your time horizon, willingness to risk and how much margin you got if trading with leverage.
June – A rough month for Ether
June has been a rough month for the cryptocurrency market, and Ether in particular closed Q2 2022 in a negative posture amid a decline in interest in the market and a worsening macroeconomic environment. Economists have warned that a global recession could be on the horizon, especially if central banks continue to act too aggressively, while the inflation keep rising.
The US Federal Reserve took a more aggressive stance to fight inflation by raising interest rates, and risk-on assets such as cryptocurrencies tend to suffer in such conditions. Fed Chair Jerome Powell said last week that the US central bank would not let the economy slip into a “higher inflation regime”, even if it means raising interest rates to levels that put growth at risk.
ETH price expectations
Many surveys show that institutional investors still remain bearish on ETH, and it is important to say that the bearish sentiment towards Ether has not been relegated to just institutional investors alone. The spot markets are also feeling the heat as sell-offs have resumed, and in light of this, ETH might have a hard time holding above the $1,000 level.
Historical price trends for ETH during Q3
Trading history also suggests that Ethereum could accelerate its losses over the next three months because, in the crypto bear markets of 2011, 2014, and 2018, the price of Ethereum weakened every time in the third quarter of the year.
Daniel Cheung, Co-founder of Pangea Fund, thinks that the worst months for cryptocurrencies could be July or August. Daniel Cheung said:
High correlation with the U.S stock market
Given the Fed’s increased hawkishness and the abnormally high inflation data, Ethereum’s recent trading at a correlation of 0.8 to Nasdaq indicates that the cryptocurrency practically “blindly” reflects patterns in traditional stock markets. These patterns are unlikely to reverse in the coming months.
According to Mike Novogratz, CEO of Galaxy Digital, cryptocurrencies could decline another 70% in the third quarter, while Chris Burniske, a partner at the crypto-focused venture capital firm Placeholder Ventures, said that a bottom in the crypto markets could be expected in the back half of 2022.
Technical analysis with support & resistance levels
Since mid-November, the cryptocurrency market has lost more than half its value, and all eyes are now watching to see whether Ether will be able to hold above the important support level that stands at $1000.
After hitting recent highs above $3580 in April 2022, Ether (ETH) has encountered losses of more than 70%. The price has stabilized now above $1000 support, but a break below this level would indicate that Ethereum could probably test the $800 support.
Bearish traders who are already holding a position in Ethereum can feel confident the downtrend will continue unless the cryptocurrency makes a higher high. The price of Ethereum is also correlated with Bitcoin, and if the price of Bitcoin drops below $17000 support, we can see new lows for Ethereum.
The price of Ethereum currently stands at around $1130, and at this value, the total market cap of Ethereum is $137 billion. On this chart (the period from January 2022), I marked current support and resistance levels to help traders understand where the price could move.
Ethereum remains in a “bearish phase “; still, if the price advances above the resistance at $1500, the next target could be located around $1700. The current support level is $1000, and if the price breaks this level, it would be a “SELL” signal, and we have the open way to $800.
Many analysts are predicting that the third quarter of 2022 will likely be a tough period for Ethereum, and the consensus appears that the price of Ethereum will drop even more before reaching the bottom of the ongoing bear market. Economists have warned that a global recession could be on the horizon, especially if central banks continue to act too aggressively. Bearish traders who are already holding a position in Ethereum can feel confident the downtrend will continue unless the cryptocurrency makes a higher high. The price of Ethereum is also in correlation with Bitcoin, and if the price of Bitcoin drops below $17000 support, we can see new lows for Ethereum.