Ethereum risks another 60% drop after breaking below $1K to 18-month lows A 2018-like bearish cycle could have Ether drop toward $420 in the coming weeks.

Ethereum's implosion continues
Investors and traders have been anxiously watching Ether's price in recent days, fearing a decisive breakdown below $1,000 would trigger the forced liquidations of massively leveraged bets. In turn, that would put more downside pressure on Ethereum.

The fears appear due to Babel Finance and Celsius Network, a pair of crypto lending platforms that halted withdrawals citing market volatility.

They intensified further after Three Arrow Capital, a crypto hedge fund managing $10 billion worth of assets as of May, failed to shore up its collateral to cover pungent bets. This came less than a month after Terra, a $40 billion "algorithmic stablecoin" project, collapsed.

These events have coincided with a massive capital withdrawal from Ethereum's blockchain ecosystem. The total value locked (TLV) unwind occurred in two parts. First, Ethereum's TVL across DeFi projects fell by $94 billion after the Terra debacle in May and then by another $30 billion by  

med-June

-The deleveraging event that is underway is observably painful, and is akin to a form of mini-financial crisis," noted CheckMate and CryptoVizArt, a pair of analysts at Glassnode, an on-chain analytics platform, adding:

"However, with this pain comes the opportunity to flush excessive out leverage, and allow for a healthier rebuild on the other side."
How low can ETH price go?
Fed's hawkish policies and the ongoing DeFi market implosion suggest extended bearish moves in the Ether market.

From a technical perspective, ETH's price must regain $1,000 as its psychological support, which, if broken to the downside, could have the token eye the $830 as its next target. The same level served as resistance in February 2018, which preceded a 90% decline to around $80 in December 2018.Meanwhile, as Cointelegraph covered earlier, ETH/USD can fall to as low as $420 if Ether's correction turns out to be anything like its 2018 bear cycle when the drawdown reached over 90%.

Related: 72 of the top 100 coins have fallen 90% or more: Here are the holdouts

Interestingly, the $420-downside target was instrumental as support in April-July 2018 and resistance in August-September 2020.