How Low Will Ethereum go? $265 is on the Table

Ethereum’s price could bottom around $265 if its decline parallels the last market cycle, a market prognosticator pointed out on Saturday.

“In its previous bear market ETH dropped 94 percent,” Twitter forecaster “CyclesFan” noted in an afternoon post. “If it repeats the same decline in this bear market the bear market low will be ~$265. Even if it drops less this time, on the monthly chart its next significant support is only ~$360. The earliest the low may happen is September.”

The sunk to roughly $880 on Saturday before bouncing to a range just shy of $1,000. The low represented a 30 percent decline from Thursday’s high of around $1,250, and a 50 percent decline from to the previous week, when it stood at $1,800. It’s fallen about 81 percent since November, when it set a high around $4,850. If Ethereum does fall to $265, it would represent an additional decline of roughly 70 percent from Saturday.

Saturday’s fall came during a rout for the cryptocurrency market more broadly. Bitcoin similarly fell by about 10 percent, from just more than $20,000 to slightly less than $18,000. The token shattered the $19,500 level that marked its high during its previous four-year cycle along the way, a historic first.

Bitcoin’s fall has been encouraged, in part, by a Celsius Network loan on the Maker Protocol. The company — which stands to lose more than $500 million in collateral if the loan is liquidated — froze customer funds on Sunday ahead of a frantic effort to add collateral and pay down the loan. As of Saturday, the loan faced a margin call if bitcoin hit a price of $13,600, down from $22,600 a week earlier.

Blockchain analyst Willy Woo, meanwhile, suggested on Tuesday that user metrics indicated a likely near-term price target for bitcoin of $15,400.

Market capitalization for the cryptocurrency market more broadly was down on Saturday by about 10 percent for the day, from $930 million to $850 million. It was down 30 percent for the week, from $1.24 trillion, and down from $2.9 trillion at its November peak.

Saturday’s prices fell significantly below predictions authored by 100x and BitMEX co-founder Arthur Hayes at the beginning of June, when he said he anticipated a bottom of $1,700 for Ethereum and $25,000 for bitcoin. In a post-mortem published on Thursday, Hayes said he expected the carnage to continue until the U.S. Federal Reserve stopped hiking interest rates — which he predicted would happen after the 2022 midterm elections.

“The politics dictate that the Fed must go larger and longer with rate hikes,” Hayes wrote in Thursday’s assessment. “I suspect that the political pressure for the Fed to be perceived as fighting inflation won’t let up until after the November U.S. midterm elections. … The number one thing that American voters care about is their personal finances. Juicy the markets, both employment and financial, will win votes. The easiest way to accomplish both of these goals is printing money. While the long term effects are deleterious, that’s the next administration’s problem.”