In a recent analysis of the fluctuating cryptocurrency market, Yuga Labs’ vice president of blockchain raised alarms about the potential for Ether (ETH) prices to plummet in a prolonged bear market. According to the executive, known as Quit, Ether could decline as low as $200, which represents a staggering total drawdown of up to 90% from current levels. This warning comes after the cryptocurrency experienced a 22% decline in just the past week.
On March 11, 2023, Quit took to social media to refute analysts suggesting that $1,500 might be the bottom for Ether. Instead, he proposed that if the market continues on its bearish trajectory, a more realistic target for a true bear market would be in the range of $200 to $400, a significant 80% reduction from current values. This analysis is reminiscent of previous cycles where extensive declines were common.
Quit mentioned feeling comfortable even if the market continues to decline, advising his followers to consider liquidating their holdings if they feel uneasy about potential losses. This perspective sparked diverse reactions from the crypto community. A significant portion of investors echoed Quit’s sentiment, believing that ETH could indeed drop further, especially if major players like Bitcoin (BTC) experience significant price shifts.
For instance, one investor set their sights on a floor price of $1,800, but upon reaching that threshold began questioning whether a drop to $1,200 was on the horizon. Another user, however, expressed skepticism regarding Quit’s forecast, suggesting that such a drastic drop would necessitate a systemic collapse similar to the events of 2018, arguing that Ether’s growing institutional adoption has strengthened its ecosystem.
The heightened caution among investors is reflected in recent market behaviors, particularly among ETH whales who are scrambling to avoid liquidation as prices hit lows not seen in weeks. Data from CoinGecko indicated that ETH fell to $1,791, promoting several wealthy holders to transfer vast sums of money in ETH to protect their positions from being liquidated.
Analysis from blockchain analytics firm Lookonchain highlighted the actions of multiple ETH whales, including one who dumped a staggering $47.8 million worth of Ether, sustaining a loss of $32 million to avoid liquidation risks. In another instance, a different investor, facing imminent liquidation, used over $5 million of their assets to adjust their liquidation price, which had already started to be compromised as prices descended below $1,800.
In a noteworthy case, a suspect account linked to the Ethereum Foundation deposited $56 million in ETH to counter liquidation risks, further underscoring the gravity of the situation. As the price continues fluctuating, many industry insiders caution that smart investors should prepare for both bullish and bearish market scenarios.
In conclusion, as the cryptocurrency market grapples with volatility, the current conditions suggest that Ether’s future could be precarious. Investors and stakeholders alike should remain vigilant to the changing tides ahead.
