ETH Drops Below the $1500 Support Level as Investors Remain Divided on the Merge
The price of Ethereum has been fluctuating wildly over the last month as investors try to predict how the company’s merger will affect the market. In the past few months, ETH went as low as around $1,000 but has recovered and is trading today at $1,500.
Investors Unsure About the Upcoming Merge
The upcoming event, the merge, is a major step in the evolution of the crypto industry. By combining the Beacon Chain and Ethereum, the two will create a system that will reduce the energy consumption of the cryptocurrency.
Despite the promises of new development for Ethereum, investors are still not convinced by the currency. ETH has dropped below the $1,500 support line, and this border has remained unchanged for the last two days.
According to a source, the trading volume on August 28 dropped by 45%. That caused a significant decline in the overall transactions. As of this writing, Ethereum is currently trading at around $1,501. The price of the cryptocurrency has dropped 8% in the last week.
Meanwhile, the number of seven-day Ethereum transactions has decreased significantly as the sentiment of global traders has changed. The drop is a concern for merchants as it affects their sales and margins.
The volume of transactions on the Perpetual Futures contract also decreased to an all-time low on August 28. According to Glassnode, this was caused by investors’ lack of confidence and enthusiasm. In addition, the network and transaction activity decline might have led to the decline. That was the first credit crisis to affect cryptocurrencies.
Bitcoin Falls Below the $20K Level
After the opening of the U.S. market on August 30, Bitcoin fell below $20,000. Data showed that some investors were selling at a loss. The S&P 500 and the Nasdaq Composite Index lost 1% in the first hour. During this period, BTC/USD also dropped 2.5%.
The latest moves in Bitcoin were no surprise to the experts, who had expected a deeper correction. Many had called for a possible bounce back to the June lows.
Crypto Ed, a popular trader, noted that the recent drops in Bitcoin and Ether gave him good opportunities to short the pair. The target for Bitcoin was $18,000 if the price failed to hold around the $19,800 region.
Il Capo of Crypto, a fellow popular account, also stuck with his prediction of major support at $19,000. He noted that a break below this level could trigger a potential bounce back to the $16,000 region.
The Dollar is Showing Improvement
As for the rest of the market, the top crypto by market cap, Bitcoin, is struggling to keep its head above water as it trades below the $20K level. Meanwhile, the global cryptocurrency market cap is currently around $912.12B, a 1.87% decrease from the previous day. During the last 24 hours, the total volume of transactions in the market stood at $68.40B, a 13% decrease.
As risk assets declined, analyst JACKIS noted that a top was likely to emerge in the U.S. dollar. Despite declining risk assets, the (U.S. dollar index)DXY index managed to gain ground. It took it above 109, within 0.5 of its highs from the day before. According to JACKIS, Bitcoin could break through the $22,500 mark if an about turn occurs in shorter time frames.
Meanwhile, due to the current market volatility, it is difficult to predict the future of Ethereum. There is still a lot of doubt about the merger’s potential impact on the asset’s price. It is also possible that the combination could cause a downward spiral that leaves many investors in a state of panic.
