In a recent analysis, popular crypto market analyst Ali Martinez issued a cautionary note to cryptocurrency investors, highlighting the critical importance of Ethereum (ETH) maintaining its support within the $1,600 – $1,550 range.
Martinez’s warning emphasized that a breach of this key support zone could expose Ethereum to substantial downside risks, potentially triggering a significant correction of 37% to 45%. Such a correction could potentially drive the price of the popular crypto token to as low as $1,000.
On August 21, the expert revealed that Vitalik Buterin, co-founder of Ethereum, moved 600 ETH worth more than $1 million to Coinbase, citing on-chain data from blockchain intelligence platform Arkham.
According to Martinez, the move could signal that Buterin is “cashing out before the anticipated ETH dip to $1,000.”
Ethereum price analysis
At the time of publication on August 22, ETH was changing hands at $1,657, down 1.17% in the past 24 hours.
The second-largest crypto asset by market cap fell by more than 10% on a weekly basis and 12% on the month, losing over $26 billion in market cap during this period.
Year-to-date, ETH remains up over 38%, though significantly underperforming Bitcoin’s (BTC) 56% surge.
Why is Ethereum falling?
The latest drop in price coincides with a broader downturn in the cryptocurrency market, which has been driven by concerns of potential interest rate increases by the Federal Reserve.
Additionally, investor sentiment has been influenced by unresolved uncertainties surrounding the legal conflict between the US Securities and Exchange Commission (SEC) and Grayscale.
This dispute pertains to Grayscale’s pursuit of converting its GBTC bitcoin trust into an exchange-traded fund (ETF) backed by spot BTC, leaving market participants awaiting further regulatory clarity.
Pseudonymous crypto analyst CrediBULL Crypto said on Tuesday that Ethereum’s recent dip below $1,570 presented a ‘fantastic buy’ opportunity for the number two cryptocurrency.
However, CrediBULL’s views differ from Martinez’s as he believes that Ethereum’s bottom is likely behind us and that ETH may be one of the first altcoins to follow the lead of Bitcoin to the upside despite the bearish stance on ETH/BTC pairing in the short term.
