If the support level for Ethereum over $1,000 continues to shatter, it has been reported that McGlone claimed the second-largest cryptocurrency asset might tumble toward a bottom not seen in almost two years, which would be around $500.
"The stability of Ethereum around $1,000 could be the critical turning point, symbolizing a greater share of the revolution of financial markets taking place in cryptocurrencies analogous to the advent of exchange-traded and futures funds.
The Reasoning Behind Mike McGlone's Hypothesis Regarding Ethereum's Potential Drop
According to McGlone, the graphic provided by Bloomberg indicates the continually increasing performance pattern of the second most valuable cryptocurrency relative to BTC as well as its lack of backup if the price of $1,000 is exceeded. At the time of this writing, the price of one Ether is 1,218 USD, reflecting a decline of 0.28% over the course of the day.
According to McGlone, the transition from a proof-of-work consensus algorithm to a proof-of-stake algorithm on Ethereum has resulted in a positive relative influence on the currency's worth.
In spite of all the energy catastrophes, Ethereum has maintained its position as the leading infrastructure for decentralized applications, and it has been quite buoyant since it made the switch to proof of stake.
Regarding Bitcoin (BTC), McGlone asserts that the level of resistance at $20,000 needs to turn into the level of support for a beneficial result to take place. To confirm recovery at levels that we expect will put Bitcoin back on a prolonged higher trajectory once and for all.
As a result, maintaining a balance that is greater than $20,000 at all times should be considered vital. The worst-case scenario is a price pullback into firm support in the range of $10,000 to $12,000. The value of one bitcoin is presently $16,303.
Why the FTX scenario will work in Ethereum's favor in the long run
The collapse of FTX caused numerous coins to become worthless across a variety of exchanges since any serious cryptocurrency endeavor could not ignore the popularity the platform had and the supply it offered. However, there is a possibility that others did not accurately predict how Ethereum would react and behave in the market.
The cryptocurrency market experienced a severe crash between November 7 and November 9, with the majority of assets experiencing declines of twenty percent or more and hitting multi-year lows. The same can be said for BTC, whose price plummeted to less than $16,000.
On the other hand, Ethereum was unaffected in any meaningful way by the crash. In contrast to other cryptocurrencies, the second-largest cryptocurrency on the market did not hit a new low during the FTX collapse. Instead, it remained relatively stable.
Instead, it reached a point of stability before reaching $880, which is the lowest it has been this year. Ethereum, which is currently trading at $1,216, is one of the most important digital assets throughout the market this week for a variety of reasons. These reasons can be broken down into a few categories.
The failure of this once-prominent centralized cryptocurrency exchange will almost certainly result in a new growth cycle for the decentralized finance sector, which also includes exchanges. This growth cycle may be sparked by the failure of this prominent centralized cryptocurrency exchange. On the other hand, decentralized exchanges (DEXs) will not suffer the same fate as exchanges like FTX because they are completely open and are managed using algorithms.