Ethereum, the second-largest cryptocurrency by market cap, might be in for a rough ride, even despite the fact the bull market is over. At least, that's what one crypto strategist reckons.
Justin Bennett, a well-known figure in the crypto world, has raised eyebrows with his latest prediction. He's not pulling any punches. Bennett thinks ETH isn't going to do well, and as such isn't a good investment.
"To say this is an important moment for ETH is a massive understatement," Bennett told his 111,100 followers on X.
How's so? Well, the analyst believes Ethereum is testing a crucial support level. It's part of what traders call an ascending channel pattern.
Bennett's outlook isn't pretty. He expects Ethereum to eventually break below this support level.
His base case? A drop to $700. That's a whopping 69% decrease from current prices.
As of writing, Ethereum is trading at $2,278. The potential downturn has got the crypto community on edge.
Bennett isn't buying into the hype around potential Fed rate cuts either. He thinks any resulting rallies could be a trap.
"Markets are forward-looking. Why would they wait for rate cuts to rally?" he questioned.
It's worth noting that Ethereum's price history has been a rollercoaster. The cryptocurrency hit an all-time high of $4,878 in November 2021, and that was the moment of the greatest optimism. Bitcoin was worth $69,000 at the moment, and many analysts predicted ETH would skyrocket at least to a $10,000 mark. That never happened.
As for the crashes, Ethereum has had a fair share of those. For instance, ETH dropped as low as to around $80 in December 2018.
Yes, that was a long time ago. But more recently, Ethereum weathered the crypto winter of 2022, when its price fell below $1,000.
It's since recovered, reaching $2,000 and staying above this mark for a little while, but Bennett's forecast suggests more turbulence ahead. Crashing below $1,000 now - in a world where ETH ETFs are already legal - might have unpredictable and easily the most uncomfortable consequences for the second largest crypto.
Of course, Ethereum is not only about the price and trading.
Like it or not, to many users Ethereum remains a cornerstone of the crypto ecosystem. Why? Well, the ETH token is traded, yes, but the core feature of the Ethereum blockchain goes far beyond that. It's the go-to platform for decentralized applications and smart contracts. Most popular and widey used stablecoins and most successful meme coins - they all exist thanks to Ethereum blockchain.
Even if ETH prices plummet, it poses no immediate threat to Ethereum ecosystem. At least, it would be fair to say that meme coins on Solana blockchain is clearly a bigger threat to Ethereum's dominance.
Whether Bennett's prediction comes true remains to be seen. But one thing's for sure – the crypto market never has a dull moment.