Popular crypto exchange FTX’s collapse is crushing and brutally killing the crypto market as the industry continues to flash red.
Furthermore, FTX’s recent Chapter 11 bankruptcy filing could bring more downside spirals and hit the market harder than ever.
Multiple cryptocurrencies have lost more than 40% of their value due to the impact that plummeted the global market cap to $780 billion, the lowest since 2021.
The current bearish trend created selling pressure among Ethereum investors, forcing them to liquidate all positions in order to get a smooth road to the downtrend of ETH.
Ethereum Trades At Risky Resistance Level!
The FTX crash has become an obstacle for Ethereum in initiating a clear positive momentum in the price chart. The current market sentiments are creating a long fearful trend for ETH price, meaning investors need to have more patience before witnessing a bull run.
In the current situation, some crypto experts are predicting further price drops for Ethereum as a leading crypto analyst firm, BitcoinCensus, Predicted Ethereum may soon face a strong rejection as it is showing a sustained price movement in the huge $1,200-$1,300 resistance area.
Moreover, Ethereum may begin an extended bearish trend soon as the transaction fee of ETH has touched a peak level since 2020, as a massive amount of Ethereum is withdrawn from exchanges by whale investors following the sudden collapse of FTX.
According to data from Glassnode, ETH on-chain activity has spiked in the past week with nearly 1 million ETH liquidated, indicating a bearish consolidation for ETH.
Where Is Ethereum Heading Next?
Ethereum has recently witnessed an increase in the liquidation of future contracts since August, as nearly $260 million worth of future contracts were liquidated, representing less interest from daily traders of Ethereum.
Looking at the daily price chart, Ethereum recently attempted to break its support at $1K as it made a low of $1,073 on 9 November.
Ethereum is currently trading in a dangerous zone as a downward retracement below its immediate support level of the Bollinger band’s lower limit at $1,160 may further push Ethereum below the price range of $1K.
The MACD line is not promising as it is gaining downside momentum and forming a long bearish candle, indicating a negative zone for Ethereum’s current price action.
The RSI-14 line dropped from a level of 60 to 29, which kicked off a sharp downtrend for Ethereum.
However, the RSI is now slowly trending upwards as it recovered from its lows and is currently trading at 41, indicating a support zone with substantial volatility for the digital asset.
Ethereum may witness a short-term bullish rally if it holds its price above the Bollinger band’s upper limit at $1,361.
ETH is predicted to show its true bullish potential by early 2023 if the crypto market is supported.
The current bearish trend of Ethereum is short term as it is usual for every digital asset to plummet due to the news of a crash; as Sam Kopelman, UK manager at Luno, noted,
“History shows that crypto tends to recover after a sustained decline, and investors certainly haven’t lost interest.”
