3 reasons Ethereum price risk 25% down in June

3 reasons Ethereum price risk 25% down in June – Mail Bonus

Native Ethereum Ether (ETH) tokens have fallen more than half of their value in 2022 in dollars, at the same time as they lost value against Bitcoin (BTC) and are now still pegged below $ 2,000 for a variety of reasons.

What’s more, ETH prices could suffer even greater losses in June due to a number of other factors, which will be discussed below.

Ethereum funds lose capital en masse

Investors have withdrawn $ 250 million from Ethereum-based investment funds by 2022, according to CoinShares’ weekly market report released on May 31.

A large outflow appears to be in contrast to other currencies. For example, investors have poured $ 369 million into Bitcoin-based investment funds by 2022.

Meanwhile, Solana and Cardano, a single-tier blockchain protocol competing with Ethereum, have pulled in $ 104 million and $ 9 million, respectively.

Flow into / from cryptocurrencies (by assets). Source: CoinShares / Bloomberg

The withdrawals from Ethereum funds are a sign of how the recent crashes in TerraUSD (UST) and Terra (LUNA) – symbols within the Terra Stablecoin ecosystem algorithm – have reduced interest in the overall financial sector (DeFi).

ETH’s good prospects are still firmly in line with expectations of a boom in the DeFi market, as blockchain Ethereum hosts the majority of financial applications in the sector. As of June 5, the total value locked (TVL) inside Ethereum-based apps was $ 68.71 million, almost 65% of the total DeFi TVL.

Ethereum TVL as of June 5th. Source: DeFi Llama

But TVL still reflects a huge retreat from Ethereum’s DeFi pools, which, before the collapse of the Luna Classic (LUNC) and TerraUSD Classic (USTC) on May 9, hovered around $ 100 billion.

With the macroeconomic risk posed by the Central Bank’s hawkish policies, coupled with a cautious outlook for the DeFi sector, Ether looks set to continue its decline in June, according to Ilan Solot, a partner at Tagus Capital.

He told the Financial Times:

“If the Central Bank is tightening, the world is in recession and people have to pay $ 4.5 per liter of petrol, it will have less to invest in DeFi or spend on blockchain games.

Slack technology

Business behavior that has been witnessed since May also raises a positive outlook for Ethereum.

In detail, Ether has been fluctuating within a range defined by horizontal directional support and a decreasing resistance line. The pattern looks more or less like a “declining triangle”, a bearish continuation pattern when it is formed in a declining trend.

Related: The total market value of cryptocurrency is likely to fall below $ 1 trillion if these 3 metrics do not improve

As a rule of technical analysis, descending triangles resolve after the price breaks decisively below their support policy line and then fall by as much as the maximum height of the triangle. Ether is at risk of undergoing a similar write-down in June, as shown in the chart below.

ETH / USD daily price chart with “declining triangle” layout. Source: TradingView

If the price of ETH breaks below the bottom line of the triangle, there is a risk that it will fall towards $ 1,350 in June, which is about 25% below today’s price.

ETH reserves on stock exchanges are increasing

The total number of Ether balances in cryptocurrencies worldwide has increased by 550,459 ETH since May, according to data from CryptoQuant.

It has amounted to almost 950 million dollars in inflows in the hot wallets of the stock exchanges since the beginning of the Terra problem.

Ethereum foreign exchange reserves. Source: CryptoQuant

Traders usually send tokens to stock exchanges when they want to exchange them for other assets. Thus, selling pressure would probably increase if the downturn in ETH stocks on the stock exchanges began to reverse.

The views and opinions expressed herein are those of the authors only and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading business involves risk, you should conduct your own research when making a decision.