The crypto market crash in January caused many assets to end the month in the negative. Ether (ETH), the second-largest cryptocurrency by market cap, closed January down 27% from December.
While Ethereum (ETH) has been posting positive returns in February, the danger may not be over for the price to drop again. Bloomberg’s analysis sees the possibility of the price of ETH dropping to $1,700. But this will leave the bullish fundamentals of Ethereum intact, the analysts say.
Bloomberg Intelligence thinks the price of ETH may drop to $1,700
In Bloomberg Intelligence’s Crypto Outlook for February, the industry-leading analysts have stated that there is a possibility that the price of the native token of the Ethereum network, Ether dropping to price levels below $2,000.
The analysts, led by senior commodity strategist Mike McGlone, stated that the ETH market has been in a consolidation phase at the end of a bull market. This is indicated by the fact that the market has been benefiting both buyers and sellers by trading in the price range between $2,000 to $4,000.
However, the quants are concerned that the price level may be broken to levels lower than $2,000. The analysis considers the possibility that Ethereum could repeat its price action of last summer and visit $1,700 price levels.
The concern stems from technicals that indicate that the price of ETH is trending towards falling below the support threshold found at price levels below its 52-week moving average.
Our graphic depicts Ethereum moving toward the bottom of the range and nearing the support threshold about 30% below its 52-week moving average. Ethereum could repeat last summer and revisit about $1,700, the analysts say.
Regardless, the sleuths note that the bullish fundamentals of Ethereum remain intact so a price drop to $1,700 would be overall bullish for Ether. It may even be necessary to purge out “weaker leveraged long positions” as it did last year.
Bullish fundamentals already playing out in the market
At the moment, the price of Ether seems to be downplaying the concern. ETH has crossed above the $3,000 price level, up around 19.7% in the last few days. ETH is trading at around $3,190, up 3.22% on the day at the time of writing.
The rest of the crypto market has been trading in the green for the past few days, with Bitcoin (BTC) again crossing over $40,000. Bitcoin, which Bloomberg’s analysis expects to have $100,000 locked in as the next price level to overcome, is currently trading at $44,000 and is posting double-digit gains like ETH in the last 7 days.