With Ethereum 2.0 in the works, the debacle over where this cryptocurrency is headed has intensified. Some of the most prominent analysts in the industry claim it can act as a catalyst for a new bull run. Meanwhile, others maintain that a major correction is underway.
A renowned chartist under the pseudonym TraderXO, for example, recently expected Ethereum to be on the upswing before continuing its march towards $ 142. Now that the giant of smart contracts has indeed risen more than 17% from Monday’s low, it could be preparing for a massive bearish boost.
Given the unpredictability of the crypto market, every scenario should be taken with a grain of salt. Nevertheless, fundamental standards suggest that such a pessimistic view may be true.
Ethereum Twitter Follow Count as a prize Forshadower
The changes in the number of followers on Ethereum’s official Twitter account seems to be strongly correlated with the price action of this altcoin. In fact, every time the number of followers of Ether’s Twitter followers drops, the price usually follows.
This strange correlation has been developing for over a year, making the predictive power of ETH’s price more credible. And Santiment’s Twitter index helps visualize this trend.
After Ether’s peak of $ 363 in late June 2019, for example, the 7-day average of Twitter followers that Ethereum had reached downward momentum. By the time this indicator fell more than 40%, sales pressure behind ETH increased and fell to $ 191.
A similar phenomenon occurred in mid-February this year. When Ethereum reached an annual high of $ 287, the average of the 7-day Twitter changes started to drop from a value of 933 to 390. A day later, ETH fell 27%. Subsequently, Santiment’s benchmark took another massive dive, followed by the infamous market meltdown in March.
Now this fundamental indicator appears to have risen on April 30, from a high of 1132 to a low of 183 recently. The significant downward movement occurred when Ethereum peaked at $ 227.
Since then, the giant of smart contracts has fallen by more than 12 percent. However, the extent to which the average of the 7-day Twitter changes decreased suggests that ETH is moving towards a steeper decline.
Strong support ahead
A spike in sales orders may lower the price of Ethereum, as the above index implies. IntoTheBlock’s “In / Out of the Money Around Price” (IOMAP) model shows that Ether could receive strong support around $ 180 on the way down.
Here, nearly 1.5 million addresses bought 6.35 million ETH. Such an important supply barrier could offer the opportunity to stop the giant of smart contracts from further decline. But if that doesn’t work, the IOMAP shows that the next support area is around $ 158.
Only time will tell whether or not the average of Santiment’s 7-day Twitter changes turns out to be right again. If that is the case, it is very likely that banked investors will take this opportunity to get back on the market. A new influx of fresh capital could ignite the bull cycle everyone was talking about.
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