3 - 5 minute read
Ethereum has been one of the most widely followed cryptocurrencies, and lately, it has been on a rally. However, a new report by Nicholas Merten, the host of DataDash, is warning Ethereum investors of an impending price correction. In this Forbes-style article, we will analyze the report by Merten, the implications of his analysis on the cryptocurrency market, and highlight possible opportunities and risks for traders.
Ethereum has been on an upward trend, trading at $2,099 at the time of writing, up 1.1% in the past 24 hours. However, in a new video update, Nicholas Merten has warned that the ongoing rally might soon collapse down to around $100 levels. Merten is drawing comparisons to a 2019 pattern that saw Ethereum rise from about $80 to around $300 before collapsing down to the $100 level.
Merten explains that Ethereum’s monthly chart shows the current price is above the momentum indicator, suggesting that the rally may not be sustainable. As a result, investors should be wary of a short-term relief rally that could ultimately lead to overexuberance in the market.
“When I see these kinds of moves, especially when I see the price above the indicator, that for me is a telltale sign that we are not ready to sustain in a long-term bull market, that this is a short-term relief rally of overexuberance in the market. It’s exactly what happened back here in May 2019 when Ethereum came all the way from around $80 all the way up to $367.”
Merten’s interpretation of Ethereum’s monthly chart shows that the current price is above the momentum indicator. This signals that investors might be overexcited, which could lead to a short-term relief rally. This scenario is similar to that of May 2019, where Ethereum had a similar spike before collapsing down to $100. Merten is, therefore, warning investors to be cautious and avoid making impulse decisions based on the current price trend.
Merten’s analysis has far-reaching implications for Ethereum investors, including the possibility of a price correction. Based on this analysis, traders should expect a short-term relief rally, which might lead to overexcitement that would be followed by a drop in prices. Traders need to be cautious and avoid making impulse decisions as this could lead to significant losses.
While the article is not all doom and gloom, there are possible opportunities for traders if they keep a level head. Merten hints that traders should consider a correction similar to what was seen in 2019 levels. Traders need to be alert to any indications of an impending price correction and take corrective measures to manage their risks.
The Bottom Line
Ethereum has been on an upward trend, with traders excited about the bullish run. However, Merten’s analysis suggests that the current rally could be short-lived. By drawing parallels with the 2019 pattern, Merten warns investors to be cautious and avoid making impulse decisions. Traders should keep a level head and manage their risks appropriately. The article highlights the possible opportunities and risks for traders and urges them to be vigilant of any signals of an impending price correction. Traders must weigh the risks and rewards carefully before making any significant investment decisions.
