- Ethereum price started a new decline after failure to break past the recovery wave above $2,400.
- Amidst the broad crypto market bloodbath, the largest altcoin has gained bearish momentum; analysts predict the risk of more losses.
- Analysts predict exhaustion among sellers and a relief rally to $2041.85.
Ethereum price gained bearish momentum after the price dropped below $2,000. The crypto market is hit by a bloodbath that has triggered a massive decline in Bitcoin and altcoins.
Ethereum price tumbles below key support level at $2,000
Ethereum price plummeted below the critical support level at $2,000 amidst the rising market volatility, in which all cryptocurrencies started a fresh decline. Based on data from OKLink, DeFi liquidations on the lending chain accounted for $64 million, the highest 24-hour liquidation volume since May 2021.
If the Ethereum price plunges to $1,500, collateral liquidations will account for $330 million. The 24-hour liquidation across several DeFi protocols is $93.25 million.
24 hour liquidation on collaterals across lending protocols
Based on the Ethereum burn tracker data, $4.3 billion in Ethereum has been burned since the implementation of EIP-1559. Despite the massive burn of over 2.3 million ETH tokens and a net reduction of 61.55% in issuance, there is no positive impact on the Ethereum price.
Typically negative issuance and a reduction in the altcoin’s circulating supply could create a shortage and fuel Ethereum’s price recovery.
Analysts have evaluated the Ethereum price trend and predicted that the altcoin remains at risk of more losses after its drop below the key support level at $2,000.
Crypto analysts believe a long-term horizon presents a net positive case for cryptocurrencies. The co-founder of Lambda markets @tedtalksmacro believes the headwinds of inflation and the tightening of central bank policy have negatively impacted the cryptocurrency market and Ethereum.
The analyst argues that cryptocurrencies like Bitcoin, Ethereum and altcoins have entered the next phase of capitulation, followed by weeks and months of re-accumulation before the next leg up.
Analysts at @IncomeSharks identified a lower time frame relief rally in Ethereum price. Analysts believe that the sell-off in Ethereum could have exhausted the bears. This implies Ethereum prices could move up.
$ETH – Just scalping a lower time frame relief rally. Quite a big sell off, sellers probably need a break. Will keep stops tight and move stops up quickly. pic.twitter.com/BQhfS3uwZG
— IncomeSharks (@IncomeSharks) May 12, 2022