Vitalik Buterin Predicts Another Bear Market – Assess the chances of ETH reversing to $3,600

While it seems increasingly likely that digital currencies are in the early stages of crypto winter, Ethereum co-founder Vitalik Buterin is opting for a more optimistic view.

In a recent interview with Bloomberg, the famous Russian-Canadian programmer said industry insiders are actually building things to “welcome” another bear market.

“They welcome the bear market because when there are long periods of price increases in large numbers like now, it’s clear it makes a lot of people happy. But also attracts a lot of very short-term speculative attention.”

Buterin predicts that many existing crypto projects could fail in a brutal bear market and only sustainable ones could survive.

The crypto market has suffered a sharp price drop over the past few months, with Bitcoin falling to $32,950 on Jan. 24. The crypto king is under intense pressure and is currently trading in the $38,000 region after rallying to $45,850 on Feb. 10. At press time, Bitcoin is down 44.56% from its all-time high hit in November 2021.

Weekly BTC/USDT | Source: Trade View

ETH is even worse, currently trading 46.06 percent below its all-time high.

Buterin’s comments echo recent commentary by Tim O’Reilly, who is credited with popularizing the term “Web 2.0”. O’Reilly compares the current state of the crypto market to the dot-com craze of the late 1990s and claims that “Web3” will only be possible after another crypto crash. The tech expert has complained about the massive valuations in the crypto industry, which he says are reminiscent of the Pets.com era.

$10 million spent on crypto promotion at the Super Bowl also brings back memories of the dot-com bubble. Many are skeptical that crypto companies could suffer the same fate as internet companies whose share prices plummeted in the early 2000s.

Price ETH test again stable support level

ETH was twice rejected by the “heavy dollar” resistance barrier, leading to a double-digit correction. As a result, the downtrend is now bouncing off the steady support, suggesting a possible trend reversal.

The price encountered a daily demand zone ranging from $2,608 to $2,812 on February 9th and 15th. As the bulls failed to break through this barrier, it resulted in a correction of more than 10% in both cases.

The move brought ETH into a daily supply zone that lasted from $3,188 to $3,393. This area is very important and ETH will see more of a bullish reaction.

From a cautious standpoint, the price could make a bottom high around the 50-day simple moving average (SMA) at $2,997. In some cases, it may be extended to retest the $3,188 supply zone floor.

On the other hand, a massively bullish outlook would take ETH above the top of the supply zone at $3,393 and head towards the convergence of the 200-day and 100-day SMA around $3,600.

ETH/USDT 4 hours | Source: Trade View

Regardless of the bullish outlook, the short-term bullish thesis will be invalidated if ETH produces a daily candle that closes below $2,608. In such a case, investors need not worry as there is another support area between $2,525 and $2,324.

Therefore, the bulls have a number of support levels and areas to recoup losses and start another uptrend.

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