The price of Ethereum is due for a bearish correction owing to a combination of contributing factors. Chiefly, the low market liquidity that is observed at the end of each year - the consequence of market seasonality - is owing to diminished trading activity. Historically, this tendency entails probable selloffs of higher-risk assets, such as Ethereum.
The global shift in monetary policy operations represents another major factor worth considering. The Federal Reserve in the U.S. and the Bank of England have already adopted distinctly more hawkish policy stances, with the latter even lifting its bank rate. Even the ECB joined the trend, though less determinately.
As central banks start to dial back their asset purchases and lift interest rates in a bid to thwart rising inflation, so investors would become increasingly more interested in lower-risk securities. This is likely to bolster Ethereum's correction as demand gradually subsides.
That is why the current setup is suitable for the implementation of contrarian trading strategies by bears. However, bulls would be monitoring the behaviour of the price action around the next major support carefully. This is where a rebound may take place, entailing excellent opportunities to buy the dip.
Profit & Loss
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