Ethereum (ETH) has experienced a significant price drop due to a massive selloff in the crypto market this week. This price decline is one of the largest in recent years, prompting more traders to liquidate their positions.
At the time of writing, Ethereum’s price stood at $2796, noting a rise of over 4% in the past 24 hours. ETH market capitalization reached $333.29 billion, while trading volume surged over 22% intraday.
Crypto Liquidations Hit $2.22 Billion: Will the Decline Continue?
The fear spreading through the crypto market led investors to offload their digital assets en masse. According to data from Coinglass, total liquidations reached $2.22 billion in a single day, with long-term traders suffering losses of $605 million due to the sharp price drop.
This selloff also significantly impacted other crypto assets such as Bitcoin, XRP, Solana, and Dogecoin. Bitcoin dropped by 6%, while XRP and Dogecoin lost 22% and 23%, respectively. The market slid further as panicked investors rushed to sell their holdings.
Ethereum Price Prediction: Can It Break $3000?
According to a post by IncomeSharks on X, ETH price has rebounded from the liquidation zone and is undergoing accumulation. This situation presents an opportunity for investors to buy at lower levels before a potential surge toward $3000.
Max Schwartzman, CEO of BecauseBitcoin, expressed a similar sentiment. “If the market stabilizes, patient holders may see rewards,” he said. However, traders remain cautious, closely analyzing macroeconomic factors that could influence Ethereum’s price in the near future.
Is It Time to Buy Ethereum?
Despite market turmoil, some industry figures remain optimistic. Eric Trump shared his positive outlook on Ethereum via the X platform, suggesting that now is a great time to buy ETH.
Following this post, Ethereum’s price began to recover. ETH price increased by 4.88% and is now trading at $2,796. However, despite the increase in price, the RSI and MACD indicators actually show a decrease which indicates a bearish trend.
Technical Analysis: Key Levels to Watch
Ethereum’s short-term price prediction suggests indecision among traders following the massive selloff. While the price has rebounded, lower trading volume indicates that many buyers are still hesitant to make large accumulations.
So far, ETH needs to break past the $3000 mark to attract more buyers. If it fails, selling pressure may persist. Technical analysis reveals several bearish indicators:
1. The Relative Strength Index (RSI) remains in the oversold region, indicating strong selling pressure.
2. The Moving Average Convergence Divergence (MACD) shows a negative crossover, signaling a potential downward trend reversal.
3. Fibonacci retracement levels reveal that the key support level is at $2600. If ETH falls below this point, a major correction could follow.
If the price breaks above the 78.3% Fibonacci retracement level at $3100, buying momentum could return, leading to further recovery.
Ethereum and Gas Limit Increase: What’s the Impact?
Ethereum is preparing to take a new step in its development. More than 52% of validators have expressed support for increasing the gas limit, marking the first adjustment since The Merge in 2022. Currently set at 30 million, Ethereum’s gas limit is expected to rise to 36 million soon, with a long-term possibility of reaching 40 million.
This upgrade aims to:
1. Increase Ethereum network capacity.
2. Facilitate crypto transactions.
3. Potentially reduce transaction fees.
Vitalik Buterin, Ethereum’s co-founder, emphasized that this change is the first fully controlled by the Proof-of-Stake (PoS) system, which is more decentralized than the previous Proof-of-Work mechanism. However, experts warn that a rapid increase could cause propagation failures and burden individual node operators.
Pectra Fork: Vitalik Buterin’s Strategic Move for Ethereum’s Future
Ethereum is set to reach a historic milestone with the Pectra upgrade scheduled for March 2025. This update not only aims to fix bugs but also redesign Ethereum’s foundation for greater efficiency and user-friendliness.
Pectra includes over 20 Ethereum Improvement Proposals (EIPs), such as:
1. EIP-7702: Converts regular accounts into smart accounts without complex migration, improving user experience.
2. EIP-7251: Increases the staking limit per validator from 32 ETH to 2048 ETH, reducing technical requirements for large holders.
This move has sparked debate: Does giving more flexibility to whales (large holders) risk centralizing Ethereum? Buterin assures that this strategy will attract more capital without compromising network efficiency.
Conclusion: Where Is Ethereum Headed Next?
Ethereum stands at a crossroads, with high market volatility and multiple innovations underway. While prices remain uncertain, network upgrades and industry support indicate that Ethereum remains an asset worth watching.
However, investors should remain cautious and consider both technical and fundamental factors before making decisions. With the gas limit increase and the Pectra upgrade on the horizon, Ethereum has the potential to become more scalable and efficient, but it also faces significant challenges in the process.
For those looking for investment opportunities, understanding Ethereum’s market dynamics and technological advancements is key to making informed decisions.
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This press release has also been published on VRITIMES
