Summary

The author predicts a significant drop in Ethereum's value, potentially as much as 55 percent, due to an impending recession that could eliminate many altcoins and severely impact the cryptocurrency market.

Abstract

The author expresses a bearish outlook on Ethereum, anticipating a substantial decline in its price. Drawing parallels to the Dot Com bust, the author suggests that a recession could purge the market of unsustainable altcoins, leaving only the most established cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) with a chance of survival based on their market capitalization and history. Despite this, the author believes that even these major cryptocurrencies will face significant challenges, with Ethereum potentially falling to $380 if it fails to hold at current levels. The author emphasizes the speculative nature of cryptocurrencies, contrasting them with traditional investments in companies with tangible assets and revenue, and suggests that a recession could dampen investor interest in crypto assets.

Opinions

The author believes that a recession will likely cause many altcoins to lose most of their value or disappear entirely.
Bitcoin and Ethereum are seen as the most resilient cryptocurrencies due to their market cap and longevity, but they are not immune to the economic downturn.
Ethereum is predicted to experience a "monster leg down" to around $380 if it doesn't maintain its current price level, with potential bounces along the way.
The author cautions that holding cryptocurrencies during a recession is risky, given the current global issues such as the war in Ukraine, supply chain disruptions, inflation, and a hostile Federal Reserve.
Cryptocurrency investments are characterized as speculative bets on future buyers, which could be jeopardized by a recession that limits people's willingness to invest in speculative assets.
The author invites Etherium holders to share their bullish perspectives, indicating an openness to considering alternative viewpoints.
The author is not a financial advisor and the content provided is not financial advice, but rather an opinion piece on the potential future of Ethereum.

Why Ethereum could drop 55 percent

Earlier I wrote about how I believe Bitcoin will touch $12,500 on the next leg down before a possible temporary bounce. Today I want to touch on Etherium.

I think that any recession — and we are headed for one — really shakes the pretenders out of any market. Look at how many fake companies died in the Dot Com bust.

That’s why I think a bunch of altcoins are probably going to zero (or pretty close) over the next couple of years or so.

If any cryptocurrency is to survive a major economic downturn on par with the 2008 crash — and I do think that’s a possibility in terms of severity — I think it will be BTC and ETH based solely on their market cap and longevity.

The cryto experiment won’t die, but like I said, a lot of coins will.

But even if BTC and ETH make it out of the next downturn, I really think there’s a ton of pain on the horizon regardless.

Let’s take a look at the Etherium chart.

The future for Etherium

Above you can see the candlesticks, a bunch of moving averages I watch, and then the black lines I’ve drawn, or my “scaffolding”.

These are what I believe to be the key levels for ETH (based on strong moves into areas of both support AND resistance), and as you can see from the red zone I’ve highlighted, it looks to me like there’s going to be a monster leg down over the coming months and years.

If Etherium doesn’t hold at its current level, I think $380 is a realistic final target for the next leg down after a possible bounce in the high $600s. If we’re in recession, I wouldn’t be surprised to see it bounce through all the black lines below that.

As I mentioned in the Bitcoin piece, holding crypto in a recession is a huge leap of faith, and there are a ton of headwinds (war in Ukraine, supply chain nightmares, rapid inflation and a hostile fed, for starters).

I’m not a financial advisor and nothing in this piece should be construed as financial advice.

However, I do know that if you diamond hand Google or JP Morgan through a recession, you’re holding something that’s tied to a real company with real assets and real revenue.

Crypto is a bet that new “investors” will come in to prop up the price.

A recession would drastically constrain people’s ability and willingness to bet on, effectively, air with a good story behind it.

If you’re an Etherium holder, I would genuinely love to hear from you in the comments about what your bull case is. I’d love to hear about an angle I may be missing!

Thanks for reading this story all the way to the end! If you enjoyed it, please consider giving it a clap or two so others can find it!

Want to walk through the chart with me? Check out this video and subscribe to my YouTube channel!

Have you found Medium via this story but aren’t yet a member? Did you know membership starts at just $5 a month (and you can cancel any time)? There’s no risk and you get access to all Medium has to offer. To continue reading stories like this and give me a ‘lil kickback, please consider supporting this publication directly by using my link to sign up! You can also leave a tip using the button below if you enjoyed this article!