What Happens to Ethereum Price If Bitcoin Crashes to $80,000?

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As a seasoned researcher who has navigated through numerous market cycles and witnessed the rise and fall of various digital assets, I find myself intrigued by the current state of Ethereum (ETH) and its potential trajectory if Bitcoin (BTC) were to plunge to $80,000.

Ethereum (ETH) is demonstrating promising signs of rebound as Bitcoin (BTC) approaches the $100,000 mark. Yet, this article delves into the potential impact on Ethereum’s price if Bitcoin were to plummet to $80,000 instead. Can ETH still aim for a test at $4,000 or will it fall lower? To gain insight, let’s analyze Ethereum’s technical aspects and examine the on-chain data to determine if Ethereum whales are buying or selling their stash.

Ethereum Price If Bitcoin Crashes To $80,000

On the four-hour graph, it’s evident that the value of ETH plunged by 25% from the double top formation on December 16. This steep decline can be attributed primarily to Bitcoin’s recent dip from $100K down to $95K. The strong link between Bitcoin and Ethereum means that Ethereum often mirrors Bitcoin’s movements. Therefore, if Bitcoin falls further to $80,000, we can expect the price of Ethereum to drop even more.

As a crypto investor, I’ve observed that the significant 25% drop primarily driven by Bitcoin caused Ethereum to reverse its previous support levels of $3,539 and $3,656 into new resistance barriers. Although there was a brief recovery bounce, the absence of strong bullish momentum combined with a weak outlook for Bitcoin, led to ETH being rejected at $3,539. This rejection suggests that the control is not currently in the hands of the bulls.

As an analyst, if the current trend persists and Bitcoin plummets to around $80,000, it’s quite likely that Ethereum might retrace its steps to approximately $3,000. In a more pessimistic forecast, the Ethereum price prediction suggests that ETH could potentially retest its support at roughly $2,500.

As an analyst, I find myself pondering over a potential surge in Bitcoin’s value beyond $100,000, triggering another bull run. If this were to happen, one might wonder about Ethereum’s response under such circumstances. Given the correlation between these two cryptocurrencies, it’s plausible that Ethereum could also experience a rally.

Whales Accumulate 240,000 ETH in a Week

It’s these significant Ethereum accumulations, carried out by whales with 10K to 100K tokens, that are lending credence to this optimistic outlook. Over the past week, the holdings of these whales have grown from 25.02 million to 25.26 million ETH.

This large-scale purchase of 240,000 ETH, valued at approximately $1.15 billion, from the Ethereum market suggests a generally optimistic trend.

Ethereum’s Short-term Holders Capitulate

According to Santiment’s 30-day MVRM (Maker of Realized/Unrealized Profit and Loss) indicator, which currently stands at approximately -10.72%, it appears that short-term ETH investors are experiencing significant losses. This metric gauges the average profit or loss for investors who recently purchased ETH within the past month, revealing an average loss of 10.72%. In situations like this, when an altcoin experiences a dip in the ‘opportunity zone’ (between -10% to -20%), short-term holders tend to sell off their assets, creating a buying opportunity for long-term investors.

In summary, if the value of Bitcoin falls to $80,000, there’s a possibility that Ethereum may retrace back to its initial support at around $3,000. Under extremely unfavorable conditions, Ethereum might even dip down to $2,500.

Ignoring a potential dip in Bitcoin’s value to $80,000, Ethereum appears optimistic from both a technical and on-chain viewpoint. However, the cloudy forecast for Bitcoin’s price suggests that we might see an extension of the correction before Bitcoin either initiates a rally or enters a consolidation phase. Until then, Ethereum’s price could continue moving horizontally as a demonstration of bullish power, or it may decrease due to its strong correlation with Bitcoin. In any case, it’s crucial for investors to realize that the lowest point is likely approaching.

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2024-12-26 16:26