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Crypto strategist predicts steep drop for Ethereum

Crypto strategist predicts steep drop for Ethereum

GrafaGrafa2024/09/09 00:45
By:Mahathir Bayena

A crypto analyst has issued a stark warning for Ethereum (CRYPTO:ETH), suggesting that the cryptocurrency could face a significant decline.

Justin Bennett, a well-known trader, told his 111,100 followers on the social media platform X that Ethereum is currently testing the lower support of an ascending channel pattern, which could spell trouble for the asset if it breaks down.

An ascending channel typically indicates that an asset is forming higher highs and higher lows, suggesting a bullish trend.

However, a breakdown below the channel’s support can lead to a sharp decline.

Bennett believes Ethereum is at a critical juncture, stating, “To say this is an important moment for ETH is a massive understatement. Probably a bounce here, but I still think we eventually see much lower for Ethereum.”

According to Bennett’s analysis, Ethereum could potentially drop to $700, a level near its long-term trendline.

Such a move would represent a nearly 70% decrease from its current price of $2,278.

Bennett has maintained this outlook for the past year, suggesting that his base-case scenario remains a significant price drop for Ethereum.

The strategist also expressed skepticism about the potential impact of a looming Federal Reserve rate cut, which some market participants anticipate could ignite new rallies in risk assets like cryptocurrencies.

He cautioned that any such rally might not be sustainable, noting that “markets are forward-looking. Why would they wait for rate cuts to rally? Any rally from risk assets following rate cuts is likely a trap.”

Bennett's warning comes at a time of heightened market uncertainty, as investors weigh macroeconomic factors and technical signals that could shape Ethereum’s future price trajectory.

While some see potential for a rebound, the prevailing sentiment among certain analysts remains cautious, highlighting the risks of downside volatility.

At the time of reporting, the Ethereum (ETH) price was $2,305.47.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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