by Aima Raza
Ethereum risks falling into a downward cycle because its ongoing price drop puts the platform near the important floor boundary from 2020.The ETH market declined 24% this month because economic uncertainty around Trump tariffs and NATO tensions combined with fears of an upcoming recession.
Markets now operate under low cash availability because investors fear unknown risks throughout the market. Many ETH investors panic sell their assets based on IntoTheBlock data that shows 47% of owners hold losing positions.
Ethereum Faces Bearish Breakdown
Standard Chartered as an investment bank has decreased its prediction of Ethereum price for the end of 2022 by 60% setting the new target at $4,000. The new price forecast shows Ethereum does not stand among the best crypto market investment options now.
The bank points out Ethereum struggles because people are adopting Base and other Layer 2 solutions to manage blockchain traffic. The networks introduced to improve Ethereum scalability indirectly reduced how much ETH users needed to buy and sold which affected its market worth.
Standard Chartered data shows that Ethereum market value dropped $50 billion when people began using Layer 2 solutions more often instead of Ethereum alone. Experts say this trend will keep creating new risks for ETH to maintain its stable market value.
Ethereum faces the possibility of breaking a five-year established level that has guided its market value throughout the years. ETH prices remain at risk because it will likely decline by 45% to $1,050 when market movement crosses below the pivotal support level that defines the symmetrical triangle formation.
Ethereum Faces Major Test
The recent market increase brings optimism to the situation for Ethereum. The Relative Strength Index indicates sellers are weakening their control over the market. The RSI stop reached its lowest value at 30 and then shifted course indicating an upcoming market revival.
When purchase power strengthens Ethereum could grow toward $3,500 which comes as an 80% profit from current market value. Optimistic view relies on the ongoing demand being uncertain due to ongoing market pessimism.
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