80% Chance That ETH Price May Drop to $2492 Before June, Bruce's Crypto Price

[Shariar Porosh]

80% Chance That ETH Price May Drop to $2492 Before June, Bruce's Crypto Price Prediction

Mixed Reactions in the Crypto Market Post-CPI Data Release

On May 15, the United States released its Consumer Price Index (CPI) data, prompting varied reactions across the cryptocurrency market. Bitcoin price experienced a notable increase, recording a 6% rise, while Solana price surged by approximately 15%. In stark contrast, Ethereum, despite its status as the second-largest cryptocurrency by market capitalization, saw a modest price increase of just around 3%. This disparity in market performance has raised concerns among investors and analysts regarding Ethereum's short-term prospects. The question arises: does Ethereum face substantial short-term risks?



Analyzing the Factors Behind Ethereum’s Short-term Vulnerability

Several factors contribute to the perceived short-term risks for Ethereum. Primarily, there is a notable lack of liquidity in the broader crypto market. The limited liquid funds available are predominantly flowing into Bitcoin and Solana, leaving altcoins like Ethereum struggling to attract sufficient investment. This liquidity crunch has significantly impacted Ethereum's ability to capitalize on positive market movements.

Moreover, the market is currently saturated with venture capital (VC) coins, many of which have too high fully diluted valuations (FDV). These valuations are deterring retail investors from entering the market, as the high FDV suggests limited upside potential. As a result, some market makers are beginning to liquidate their holdings and exit the market. This trend is particularly concerning for Ethereum, as a significant portion of these VC coins are built on the Ethereum network. The exit of market makers could exert substantial downward pressure on Ethereum price in the short term.

Additionally, the imminent unlocking of numerous cryptocurrencies poses another risk. As these tokens become available for trading, the increased supply could further depress Ethereum’s price. The combination of low liquidity, high FDV coins, and the upcoming token unlocks all present a challenging environment for Ethereum in the short term.

Projected Price Movements of Ethereum and Investment Insights

In light of these factors, there is a significant probability that Ethereum's price may dip below the $2,500 mark in the short term, with an estimated 80% chance of such a decline. In the first wave of decline, ETH price may drop to $2492. If that support level is broken, the price may continue decline to $2163. Under the worst scenario, ETH price may fall to around $1800. Should Ethereum's price fall to about $1,800, it might present a strategic buying opportunity for investors. Despite the short-term risks, the long-term outlook for Ethereum remains positive.

The anticipated short-term decline is likely a result of market makers orchestrating a washout to accumulate more tokens at lower prices. This washout phase, characterized by increased selling pressure and subsequent price drops, is a common tactic used by large market players to consolidate their positions. Once this phase concludes, Ethereum is expected to recover and embark on a new upward trajectory.

Investors should consider this potential price drop as an opportunity to enter the market at a lower cost basis. The underlying fundamentals of Ethereum, including its robust blockchain infrastructure and wide range of applications, remain strong. As the market stabilizes post-washout, Ethereum is likely to resume its growth, driven by renewed investor confidence and continued technological advancements.

For now, selling Ethereum and buying Bitcoin and Solana seems a more rational decision.
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Conclusion:
While Ethereum faces significant short-term risks due to liquidity issues, high FDV coins, and upcoming token unlocks, these challenges are not indicative of a long-term decline. Savvy investors should monitor the market closely and be prepared to capitalize on potential buying opportunities as the price dips. The long-term prospects for Ethereum remain promising, with the current period of volatility offering a strategic entry point for those looking to invest in one of the most influential cryptocurrencies in the market.

Disclaimer: The above content does not constitute any investment advice from BingX. Investing in cryptocurrencies is risky, possibly resulting in the loss of the entire capital. Investors should conduct their own research (DYOR). BingX is not responsible for any losses incurred.

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Why did the article not take into account the recent approval of the Ethereum ETF, which has led to an increase in more liquidity on Ethereum, as cash flows are not limited to Bitcoin and Solana, Ethereum, and it is true that Solana took a percentage of the market, but will it continue to get a good percentage or will the price collapse as A year ago, no one wanted to invest in this currency.