Ethereum Is Signaling Red, Should You Worry About the Long Term?

Crypto markets are undergoing a correction, with Bitcoin and Ethereum giving back gains from previous weeks. The general sentiment in the sector is bullish, but it could take a hit if major cryptocurrencies lose their current levels.

At the time of writing, Ethereum (ETH) is trading at $1,690, down 10% over the past 24 hours and 7 days. The cryptocurrency retains a key support area at $1,700 that has turned from major resistance to support.

The price of ETH is trading sideways on the 4-hour chart. resource: ETHUSDT trading view

In a market update, BitMEX founder Arthur Hayes called short-term price action across the crypto market “ugly” as he sees the potential for further declines.Hayes Say Via Twitter:

Short-term price action is ugly. Assuming you’re bullish, this probably means you’re reading the market wrong. Time to cover up, sit tight, or add more? It all depends on your guts and your ability to read charts.

In the short term, traders may lose money, but if traders trade long-term on Ethereum, Hayes believes there is no “fundamental change” in the second cryptocurrency by market capitalization. In less than a month, Ethereum will deploy “The Merge” on mainnet.

This event will mark the complete transition of ETH to a proof-of-stake (PoS) blockchain. In one of the most anticipated events in the history of the crypto market, Ethereum will lay the foundation for a network that consumes less energy and is more scalable and accessible.

In the past, Hayes has said that a “merger” would be an extraordinary event for ETH’s price, as the cryptocurrency would manage to attract new funding. The BitMEX founder believes that once the blockchain reduces its energy consumption, the funds that are on hold will flow and potentially push the price of ETH higher. Hayes said:

If you tell me that the $ETH merger didn’t happen, or that something happened that seriously reduces the odds of success, then I’d worry about my long position.

Is it time to increase your Ethereum holdings?

In this sense, traders should pay close attention to “mergers” and any potential roadblocks, as they could negatively affect the price of Ethereum. At the time of writing, the update is in progress, but the price of ETH must remain at current levels to prevent further declines.

If bears take control of the market, analyst Justin Bennett believes that the price of Ethereum could bottom at $300. Bennett said:

Unpopular opinion: ETH’s bottom could be closer to $300 than $1,000. “That will never happen,” they would say. Already did this during the last #crypto bear market. That’s before a global recession, a bear market in stock markets and inflation soaring to new highs in many developed countries.

ETH price key resistance and support levels.Source: Justin Bennett via Twitter

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