Although Ethereum price appears to be stabilizing below $2,000, the slowing crash has done nothing to ease fears of further declines to come. In fact, analysts believe that this halt is only temporary and that the second largest cryptocurrency by market capitalization will soon see another significant decline. This is due to past performance, where Ethereum price has often undergone a major reset before finally hitting a possible bottom.
The Scenario That Ethereum Price Heads Towards $600
Calls for Ethereum to reach $10,000 to $15,000 found a resounding echo last year, when the market was still in the throes of a bull market. However, those hopes have since been dashed, with even $5,000 now looking like a pipe dream. However, analysts like Alexhiz on the TradingView site believe that the dream is not completely gone, even if the path to this goal could be quite bumpy.
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In a recent article, the crypto analyst explains that it is likely that Ethereum will undergo a major macro-correction. If correct, it means that the support the altcoin appears to have established above $1,900 is fragile at best and could end up breaking soon.
The bearish scenario mentioned by Alex is a further 60% price drop, which would eventually drive the price of Ethereum down to as low as $600. Even though such a price level could be disastrous in the short term, the analyst believes it is necessary for the 5-digit scenario to come true.
Why a crash is a good thing
If the price of Ethereum fell as low as $600, the crypto analyst believes it would mean a complete liquidity reset and total market capitulation. Such a scenario would allow for strong accumulation in the long term, with stronger hands taking control of prices.
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What would follow the accumulation phase would be an expansion phase, where the price could rise rapidly. The analyst also added: “Longer term (2028-2029), in a renewed bull cycle, ETH could target the $10,000-$15,000 range depending on historical cycle behavior and liquidity growth.
Under these conditions, such a scenario would take years to realize, as there could be a long-term accumulation trend, like that observed during the previous cycle. Growth could also depend heavily on the price performance of Bitcoin, having been the market leader for over a decade.
Featured image of Dall.E, chart by TradingView.com
