Aug 22, 2022 at 03:35Crypto analyst Benjamin Cowen outlined the worst-case scenarios for price action on Ethereum. The most pessimistic suggests a drop to a range between $400 and $800. In his opinion, that would be the worst thing to happen to ETH, but it would also give the bulls a rare and vital chance.
“Some people have asked me what is my worst-case scenario on Ethereum. For me, I would look at the logarithmic regression band and say that’s probably the worst-case scenario for Ether. If it were to just simply get rejected off of the bull market support band like it did in March… I would be looking at this as a potential accumulating phase of a lifetime,” he said.
At the same time, the crypto strategist believes that Ethereum has another let if the long-awaited update comes just as the U.S. Federal Reserve’s monetary policy updates.
“If Ethereum gets rejected here and goes and puts in a lower low, I would likely consider that a better candidate for an accumulation phase of lifetime. If, on the other hand, Ethereum rallies through and the transition from Proof-of-Work to Proof-of-Stake goes through amazingly without any issues – I do think that a lot of these software upgrades, you do need to understand that a lot of things go wrong – but if it goes off without a hitch, the Fed pivots, then perhaps we could see some other route being taken,” Cowen added.
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A game-changing update to Ethereum from the Proof-of-Work to the Proof-of-Stake algorithm (The Merge) is scheduled for September 15.
How to profit from the fork?
Rumors are circulating on Reddit that a supposedly well-funded group of miners will try to fork ETH on X-Day. Everyone who has ETH at the time of the fork will now own OG ETH and MINER ETH on two separate and incompatible chains. And there is no telling how much they will be worth.
For example, the price of Bitcoin Cash (BCH) was incredibly volatile during the fork because liquidity was low. The initial cost of $500 dropped to $200 and then went up about $900 in a relatively short period.
That said, the user nicknamed MilesPower thinks it’s quite possible to make money on the quick “in and out” at the time of the ETH fork.
Most exchanges tell users in advance if they will support a new fork coin or not and at what block they will take a snapshot of all user accounts (similar to airdrop — that’s what most of them did during the BCH fork from BTC).
“A well-timed trade into ETH for a single block period can yield maximum MinerETH with minimum risk to the price appreciation of the assets you wish to trade back into.Trade is simple: find an exchange that WILL support the forked coin. Move everything you are comfortable with to that exchange, wait for the snapshot block to approach, immediately swap every coin you have into ETH ahead of that block, wait for the next block, then immediately ‘undo’ all those trades back into your chosen cryptocurrencies,” he recommended.
MilesPower expects the ETH fork to trade at 20% or even 10% of ETH. In the long run, however, it could fall to 0.
But there are risks too, and plenty of them. Keeping it on an exchange is always a risk, as is a tax liability and a rise in the price of selected digital assets if ETH totally plummets.
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