The second largest asset in cryptocurrencies in terms of market value faces downward momentum before its long-awaited upgrade, according to a new report by Bloomberg.
The report says that based on technical analysis, Ethereum (ETH) could drop by more than 30% from its current levels before moving from a business-proof consensus mechanism (PoW) to one bet proof (POS).
The upgrade, referred to as “consolidation”, is scheduled to take place sometime in mid-September.
“Ether may fall to $1000 for the first time in two months, with volatile price fluctuations in the second-largest cryptocurrency before the long-awaited merger upgrade.
Technical indicators on momentum and price trends show that the symbol is likely to continue to fall from a peak of about $2,000 in mid-August to the current region near $1,500. ”
The leading smart contract platform trades for $1,525 at the time of writing, down slightly more than 20% over the past two weeks.
The co-founder of independent research provider Fairlead Strategies Katie Stockton told Bloomberg that technical indicators, such as moving averages and random oscillators, all indicate a downward view of Ethereum.
“Ether has collapsed below initial support from its 50-day moving average, raising downside risks with negative short-term momentum now. Weekly random materials experienced a decline for the first time since April [suggesting a possible re-test of support at around $1,000] in the coming days. ”
A random oscillator is a momentum indicator comparing a specific closing price for security to a set of its prices over a given period of time.