Why Ethereum Might Crash Soon
Ethereum rose on the back of a smooth upgrade and a U.S.-China trade deal, but will it fall in the near future?
Quick overview
- Ethereum (ETH) surged 44% in the past week, driven by a trade agreement and the successful launch of the Pectra upgrade.
- Despite recent gains, Ethereum is showing signs of losing momentum, with a slight loss of 0.05% over the last day.
- The successful hard fork during the Pectra upgrade alleviated initial concerns, but analysts warn of potential volatility ahead.
- High trade volume indicates ongoing demand, yet there are fears of a correction as the hype surrounding recent events fades.
Live ETH/USD Chart
Ethereum (ETH) rose 44% over the last week, fueled partly by the Chinese-United States trade agreement but also by the Ethereum Pectra upgrade launch that went astoundingly well.
It looks like Ethereum may be losing momentum, as it climbed from $1,796 (ETH/USD) to $2,546 in a week, but it has slowed to a loss of 0.05% over the last day. Despite its tremendous gains, Ethereum may not be able to climb further, and in fact, it could be in danger of crashing.
ETH/USDThe hype surrounding the Pectra launch was sustained when the upgrade managed a hard fork without any major issues. There were concerns that the coin would not be live for a short period of time, as there are every time there is a major change to the coin. Analysts compare this kind of upgrade to trying to fix a high performance car while it is in motion, so a number of things could go wrong. But thankfully for ETH investors, the hard fork went smoothly.
What Could Happen to Ethereum
Now that the Pectra upgrade has finished and the hype over the recent trade agreement is dying down, Ethereum could quickly lose steam. There is concern that the coin rose too quickly all at once and could crash as a result. Bitcoin (BTC) also did really well recently and gained more than 4% over a 24-hour period. But BTC was not boosted by an upgrade going well, so even if it loses momentum, it likely will not come down as hard as Ethereum could.
Ethereum’s recent bullish movement has been driven by real market demand for the coin, which is very promising. This means there is less chance that a major drop will happen, but the coin is likely to correct to some degree. The concern is how much correction will take place.
Trade volume for the coin is still high, up by 5% over the last 24 hours, but not tremendously high. There are indications that the coin is slowing down and could stagnate or drop very soon- as soon as the end of the day.
However, because the trade agreement frees up ETH and the wider cryptocurrency market as well as the stock market, there should be a strong amount of market support for the coin. Even if Ethereum does fall quickly and steeply, we expect that it will bounce back almost to its current level shortly thereafter.
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