This Technical Chart Shows ETH Can Drop to $1,000 Again

After a strong drop over the weekend, the ETH price has jumped once again by nearly 6%. As of press time, ETH is trading at $1,542 with a market cap of $187 billion. However, the technical chart formations suggest that ETH could once again retest the support levels of $1,000.

Recently, there have been volatile price swings for ETH ahead of the much-anticipated Merge upgrade on September 15. The ETH price is already down by 25% from the peak of $2,000 earlier in August.

Ether came under heavy selling pressure over the last weekend after the Fed Jackson Hole meeting wherein Fed Chair Jerome Powell hinted at strong quantitative tightening measures ahead to control inflation. Speaking to Bloomberg, Katie Stockton, co-founder of Fairlead Strategies said:

Ether has broken down below initial support from its 50-day moving average, increasing downside risk with short-term momentum now negative. The weekly stochastics have a downturn for the first time since April,” suggesting a retest of support at about $1000 is likely “in the coming days”.

Is the Ethereum Merge Optimism Over?

After a major crash in the second quarter, the ETH price gained momentum once again over the optimism surrounding the Merge upgrade next month. The Merge upgrade will transition the Ethereum blockchain to a proof-of-stake network.

However, the recent selling pressure shows that fears of global macro have taken over the Merge optimism. In a note to investors, analysts at Bitfinex said:

“Ethereum’s drop ahead of the impending Merge is also of note as bearish sentiment appears to be taking hold across all so-called risk assets. The volatility that has become so characteristic of the digital token space shows no signs of abating.”

The first Ethereum network fork will happen on September 6 which will increase the chances of Merge. If things go as per the plan, EHT might show strength once again and could rally all the way to $2,200.