Ethereum and altcoins could see sharp correction if they lose this crucial support, says trader
2 min read
The market for ETH and other altcoins could suffer a sharp drop if they lose crucial support in BTC (BTC). This statement came from trader Nicholas Merten in a video published on his channel, DataDash.
According to Merten, the global commodity crisis also poses a risk to cryptocurrencies. In this regard, the Ether/BTC (ETH/BTC) pair poses some risks if it drops below 0.06 BTC per ETH.
Crucial support
In the video, Merten tells his 511,000 subscribers that there is still market confidence in the ETH/BTC pair, but points to the downward trend. According to the chart below, the price of ETH is approaching the support of 0.06 BTC.
“We have seen here that we are having another drop in the price of ETH. But, so far, we have continued to maintain the trend we started here in June of lower bottoms and testing support in this area,” he said.
In technical analysis, lower tops and lower bottoms indicate loss of buying strength, i.e. downward trend. Merten says there is still confidence in the market, but a further 10% drop and breakout of support could destroy that confidence.
“This range that we have on the chart is somewhere in the worst case scenarios, 0.06 in ETH/BTC ratios. The current price of ETH is 0.066 – if there is a 10% drop from this ratio, this could be a telltale sign that the market is ready for a long downtrend.”
Long term with fluctuations
For the long term, Merten remains optimistic about cryptocurrencies, especially ETH. But as he explains later, that doesn’t mean the price won’t swing before reaching new potential highs.
In his view, altcoins emerge as one of the most promising technologies for the 2020s. However, the external scenario will still bring a lot of volatility in the short term, something that is already being seen in other markets.
Nickel prices, for example, rose 100% in a few hours, as pointed economist Fernando Ulrich. This is because Russia, the world’s largest nickel producer, has seen its economy strangled by various sanctions imposed in response to the invasion of Ukraine.
Therefore, the risk of a global derangement still looms, which could harm cryptocurrencies. At the time of writing, ETH is trading at $2,581 at press time, while its BTC pair remains at 0.069 BTC.
