During the Asian trading session on Monday morning, the price of Ethereum is still going down. Since late Friday, the commodity has lost a shocking 24 percent of its value. At the time of writing, the price of ETH was around $1,350, which was an 8 percent drop from the day before. The sell-off was still going on.
An on-chain analytics company called Glassnode says that the Ethereum market has fallen below the ETH Realized Price of $1,781. On June 12, the asset had dropped to $1,453. Since then, it has lost a lot more.
Because the real price of ETH 2.0 deposits is much higher, the bear attack over the weekend caused unrealized losses of almost 40%.
ETH Staking Has Some Problems
People are worried that the ETH that is currently staked and locked on Beacon Chain will flood the markets after the Merge, which will happen later this year. It could cause prices to drop even more than they already have. But after the Merge, the assets will be given out in stages over a few months.
Alex Krüger, a market expert, says that ETH’s price has dropped back to its previous high point during the 2018 cycle, but it is now below that level.
Technical indicators for ETH, such as the RSI, are now in the “oversold” area. Even though there might be a small bounce back up, the bear market is getting worse, which means that Ethereum and other cryptocurrencies are in for more bad news for now.
There are also worries about staking systems like Lido, which make up more than a third of all funds staked. Industry experts say that this kind of centralized control could lead to a network attack.
De-pegging assets that have been staked is another problem. When users stake ETH on Lido, they get stETH in return, which they can use on other DeFi platforms as collateral. According to CoinGecko, the large sell-off has caused a price difference between ETH and its staking token, which is currently trading 4.4% below its peg.
Price of Ethereum Broken Down
After a head and shoulders pattern formed and was confirmed, technical experts predicted that the price of Ethereum would drop by a lot. Due to the bad future, one researcher says that the price of ETH will be around $650 in the near future.
A drop that low would mean a correction of about 87 percent, and since ETH fell by 84 percent in the last cycle, he may not be too far off with his prediction.
On the other hand, Ethereum’s long-term prospects look good, especially after it switches to proof-of-stake and makes improvements to its ability to scale. Supply issuance is likely to lead to deflation, but investors will still make money from it, making it a unique asset.
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