The changes in the Ethereum network and the need for the ETH 2.0 version have motivated investors to hoard more Ether. Ether might drop against USDT in the short term if the bullish channel, forming on July 4th, breaks to the downside.
Those investing in the Ethereum cryptocurrency Ether (ETH) must pay attention to price fluctuations in the following hours. Those movements may define whether the crypto asset will break above USD 1,200 or drop back to USD 1,000. Although some fundamental factors are in its favor, the bears may also exert selling pressure.
Ether is trading at around USD 1,185 and has accumulated a 1.8% over the last 24 hours. While its daily trading volume is above USD 25.55 billion, its market capitalization is around USD 406.80 billion, according to CoinGecko.
Some Fundamental Factors May Drive the Ether Price Up
It is evident that there is a bearish trend, and the bullish run starting in 2020 has ended. However, some fundamental factors may cause strong interest to grow among Ether bulls.
In that regard, it is relevant to remember the changes in the Ethereum network and the need for the ETH 2.0 version. In addition, leading investment funds have their sights on this cryptocurrency, as they are looking for long-term positions.
That has motivated investors to hoard increasing amounts of Ether. Various well-known funds and institutions have pointed out that ETH might exceed the market capitalization of Bitcoin in the following bullish cycle. Since that may happen in a long time, the short term may be more attractive now. Many investors are looking for entry points to operate and take advantage of the drop in the price.
The Technical Analysis Indicates ETH May Drop to USD 1,000
The 4-hour charts show Ether might drop against USDT in the short term if the bullish channel, forming on July 4th, breaks to the downside.
The Relative Strength Index (RSI) was recently at overbought levels after reaching relevant resistance at USD 1,270. In addition, it crossed its moving averages to the downside, positioning itself at 57 points with a bearish trend.
Before confirming the drop back to USD 1,000, the price of ETH must break the current support zone at USD 1,200. From that point, the bears might regain control over the market.
The moving average convergence divergence (MACD) also indicates that a trend reversal is about to occur. The same as with the RSI, it made a bearish crossing with its moving averages, suggesting an imminent change in trend.
Investors should research a crypto asset before buying it to know its all-time high, behavior, and possible future characteristics. That will allow them to find the best investment opportunity, reducing the risk of losing money.
By Alexander Salazar
