This post will talk about the latest important news connected with Ethereum (ETH) and Terra (LUNA) and where the price of these two cryptocurrencies could move in the upcoming period.
The cryptocurrency market remains under pressure as the prospect of renewed lockdowns, and rising COVID-19 cases made investors nervous. Many countries reported an all-time high of new daily infections at the beginning of 2022 year, leading to staffing issues across industries, and investors have seen that the virus still has the ability to disrupt business.
The price of most public cryptocurrencies has collapsed in a relatively short period, and some analysts are predicting that 2022 would likely be a tough year for the cryptocurrency market. The crypto market has lost more than $300 billion in the first week of 2022, and institutional investors will not hesitate to dump their positions if the situation gets worse.
After hitting record highs above $4860, Ethereum has encountered losses of more than 35% in less than several weeks. The price has stabilized now above $3000, but a break below the $2800 level would indicate that Ethereum could probably test the $2500 support. Interesting times ahead, no doubt. Our favourite place to trade ETH and Terra is Skilling (review), that just lowered their spreads to near zero.
It is very hard to measure the real fundamental value of this cryptocurrency and predict where Ethereum's price will go in the long term; still, according to JP Morgan, Ethereum is losing dominance in the DeFi space.
Is Terra a strong competitor?
Managing Director of JP Morgan, Nikolaos Panigirtzoglou said last week that many cryptocurrency protocols such as Terra, Avalanche, and Solana emerged as strong competitors in 2021, and because of this, Ethereum's supremacy is at risk of being further eroded in the ongoing year. Nikolaos Panigirtzoglou added:
“In other words, Ethereum is currently in an intense race to maintain its dominance in the application space, with the outcome of that race far from given. Ethereum currently accounts for nearly 65% of DeFi's market share, and some other cryptocurrency projects might close the gap even more as they have been receiving large amounts of funding and public attention.”
Terra (LUNA) also remains under pressure, its price has weakened from record highs above $100, and for now, the risk of further decline still persists.
The price of these two cryptocurrencies is also in correlation with Bitcoin, and if the price of Bitcoin drops below $40000 support, we can see new lows for Ethereum and Terra.
Technical analysis of Ethereum (ETH)
Ethereum has weakened from its record highs, and the risk of further declines is not over yet. The price has stabilized now above $3000, but we can expect that the price could test again this support level in the upcoming days or even hours. A break below $3000 would indicate that Ethereum could probably test the $2800 level according to technical analysis rules.
Ethereum remains in the “bearish phase”; still, if the price advances above $3500 resistance, the next price target could be located around $3800.
Technical analysis of Terra (LUNA)
Terra is a blockchain protocol that uses fiat-pegged stablecoins to power price-stable global payments systems. Terra combines the price stability and wide adoption of fiat currencies, and its native token, LUNA, is used to stabilize the price of the protocol's stablecoins.
Terra (LUNA) has weakened from record highs above $100, and for now, everything indicates that we could see even lower prices. The price of LUNA currently stands around $73, and at this value, the total market cap of Terra is around $60 billion. What do you think is a fair value for one of the fastest growing cryptocurrencies? Try out crypto CFD trading with Skilling, that got almost zero in spread.
On this chart (the period from September 2021), I marked current support and resistance levels to help traders understand where the price could move. The more often price tests a level of resistance or support without breaking it, the stronger the resistance or support area is. The current support level is $60, and if the price breaks this level, it would be a “SELL” signal, and we have the open way to $50. If the price drops below $50, which represents very strong support, the next target could be located around $40 or even below. Terra (LUNA) remains in the “bearish phase”; still, if the price advances again above $80, the next resistance could be located around $90.
Conclusion
The price of most public cryptocurrencies has collapsed at the beginning of the new year, and some analysts are predicting that 2022 would likely be a tough year for the cryptocurrency market. The crypto market has lost more than $300 billion in the first week of 2022, and institutional investors will not hesitate to dump their positions if the situation gets worse. Ethereum and Terra are also in correlation with Bitcoin, and if the price of Bitcoin drops below $40000 support, we can see new lows for Ethereum and Terra. According to JP Morgan, Ethereum is losing dominance in the DeFi space, and some other cryptocurrency projects might close the gap even more as they have been receiving large amounts of funding and public attention.
