The altcoins were displaying notable strength after a slight variation with the Bitcoin price earlier. With gaining momentum, the altcoins mainly Ethereum displayed a notable tendency to breach through $3000 levels. However, quickly the bear capitulated the space and dragged the price below $2500. No doubt the asset is undergoing a notable flip, yet the fear of a substantial plunge still hovers the rally.
In a recent update, a cryptoanalyst warns that the Ethereum and the entire altcoin market of a potential drop soon. The ETH/USDT pair showcase the possibility of losing the value yet the BTC pair keeps up the hope alive. As the ETH price continues to remain distinct from the $3000 mark, the analyst believes the asset has reached an extremely fragile point.
“If we break below this range that we have on the chart, which is somewhere around the worst-case scenarios, 0.06 on the ETH/BTC ratios, we’re currently in 0.66. If we get another 10% decline against that ratio, this could be a tell-tale sign that the market is ready for a longer drawdown”
He believes 0.06 is the crucial zone that may decide the upcoming price trend for the Ethereum and the altcoins space. At the time of writing, the Ethereum price is trading at $2708 and the ETB/BTC pair is around 0.065
More Bearish Scenarios for Ethereum!
As the ETH price fails to trade even close to $3000 for a very long time, the futures premium have dropped significantly. The basis point of the three-month annualised contract is trading below 5% for a long time. Despite a slight recovery, the market participants are not willing to open the long positions for the asset.
Source: laevitas.ch
Yet, another scenario that fuels the bearish scenario is the long to short net ratio. The traders are keener in shorting the ETH price rather than longing the asset. And hence with more concentration of the ETH shorts, the price is also expected to impact negatively.
Source: Coinglass
The ratio is drawn considering the top traders’ positions in the particular time period. Currently, 52.67% of the traders have shorted the asset compared to 47.33% of them who longed. Therefore, going on with the trend of the Ethereum(ETH) price may witness a notable bearish trend ahead.
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