Ethereum might risk further drop to $1,000
Ethereum Its historic “merge” upgrade led to a decline in the digital asset following what some market analysts dubbed a “sell-the-news” phenomenon.
The second largest cryptocurrency by market value was down 7.36% to $1,473 at the time of publication, marking its greatest daily loss since Aug. 26. The largest cryptocurrency, Bitcoin (BTC), was down only approximately 1.63% on the day.
According to crypto analyst willy wooSignificant amounts of ETH arrived on exchanges prior to the merge event – often taken as a sign that holders are getting ready to dump.
Data from cryptocurrency futures markets reveals that many investors appear to have closed out hedged positions in the hours following the Merge, indicating that they tied up deals they had placed over the previous month or recent weeks to speculate on the event’s potential outcomes. The hype surrounding the Merge is now over, but Ethereum will now need another short-term catalyst.
Ethereum risks another 31% drop
According to crypto analyst Ali MartinezEthereum is likely to risk further downside to $1,000, which represents a drop of 31% from current prices in the event of a decisive break below the $1,460 support.
Ahead of the Merge, Glassnode reported that a futures and options backward movement after September indicated that a “sell-the-news” assumption was in play ahead of the event. On-chain analytics firm Glassnode also highlighted the fact that futures traders were pricing ETH at a discount post-Merge and were willing to pay a premium for downside protection. This is based on the relatively lower demand for ETH exposure via options after the Merge event.
The implementation of strict monetary policy to combat extreme inflation has resulted in a fall in cryptocurrency prices this year along with other risky investments. However, the merge is seen as a long-term driver for Ether as it enhances the environmental image of Ethereum.
