How likely is Ethereum price to surge to $4,000 after recent crash | Cryptocurrency

  • Ethereum price is again testing confluence of support, ranging from $3,000 to $2,800.
  • A break of this barrier could lead to a strong correction to $2,000.
  • Short-term on-chain measurements suggest further southward movement is possible.

Ethereum price has come to a vital support level after crashing last week. This decline puts ETH at a tipping point or turning point, indicating that things could go either way. However, if the big crypto continues to stumble, the smart contract token will likely follow.

The merger and the first test

Ethereum developers have promised massive network upgrades to move it from proof-of-work (PoW) to proof-of-stake (Pos). However, not all updates have been timely. After countless delays, ETH is finally getting closer to the highly anticipated Merge thanks to some developers’ recent test.

Although the launch date for Merge has yet to be officially announced, it is expected to bring major ramifications to the network, ranging from improved security, higher transaction counts and reduced impact on the network. environment, among others.

This test was performed on a shade fork to avoid impact to the main chain. Parithosh, a developer related to the topic tweeted,

The merged pandas have arrived! mainnet-shadow-fork-1 reached TTD about half an hour ago. We finalized and produced blocks! We quickly noticed seemingly minor issues with Nethermind and Besu (triage in progress). Erigon is currently syncing with head, status update later.

Arthur Hayes, the former CEO and founder of BitMEX said in his blog post that after the merger, institutional investors might flock to ETH as it would serve as a de facto bond with a higher yield than Treasuries.

In the same blog, Hayes also predicted the possibility of Ethereum price reaching $10,000 by the end of 2022.

Ethereum Price From An Optimist’s Perspective

Ethereum price crashed around 17% after being rejected at the 200-day simple moving average (SMA) at $3,491. The move comes after multiple rejections since January 13 and is an important development that pushed it below the high volume node of the volume profile at $3,136.

However, this decline pushed ETH towards the confluence of immediate support at around $3,000, comprising the $2,820-$2,966 demand zone, the 50- and 100-day SMAs. Therefore, investors can expect a rebound from this level to trigger another acceleration.

The resulting rally must go through the high volume node at $3,136 and fight against the 200-day SMA at $3,491. In some cases, this move could pierce higher to fill the low volume node extending up to $3,703.

Only in a very bullish scenario will the Ethereum price retest the psychological level of $4,000.

ETH and its worst-case scenario

While the outlook above takes a bullish approach, a dire scenario includes a breakdown of the confluence of support, ranging from $3,000 to $2,800. A decisive move below this zone will confirm a bearish breakout and pave the way for traders to take control.

In such an event, Ethereum price will fall freely to $2,541, which is a key support level that will prevent another crash to $1,968. In a doomsday scenario, ETH leveling below $2,000 could be a possibility, especially if the big crypto also crashes.

Additionally, the volume profile is also thinning considerably below $2,541, adding even more credence to the downtrend scenario.

ETH/USDT 1-Day Chart

The prediction of a slow and steady upward trend in Ethereum price is supported by a recent surge in one-hour active addresses from 35,000 to 60,000. This sudden surge was seen on April 5 and comes after months of lateral movement.

The change in trend indicates that investors are interacting with the ETH blockchain and likely buying the dip after the recent crash.

While the rise in active addresses is undoubtedly bullish, on-chain volume is producing a lower high since April 2 and predicts that an uptrend may be delayed.

Active ETH addresses vs on-chain volume

Active ETH addresses vs on-chain volume

The 30-day Market Value to Realized Value (MVRV) pattern supports the bearish outlook. This on-chain metric is used to determine the average profit/loss of investors who bought ETH in the last month.

Currently, the index is hovering around -6%, but as historical data shows, a local low is forming at around -10%, indicating that there is more room to the south.

30 Day ETH MVRV

30 Day ETH MVRV

Although the forces appear to be balanced for Ethereum price, the confluence of support is a key determinant of the direction of the cryptocurrency in the near future. A breakdown could send ETH down to $2,541 and in some cases to $1,730. A bounce off the same support zone could be the key to triggering a surge that breaks the 200-day SMA at $3,491 and retests the psychological level of $4,000.



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How likely is Ethereum price to surge to $4,000 after recent crash | Cryptocurrency


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