In its latest prediction, Matrixport, a financial services network, released a report forecasting a dramatic dip in Ethereum’s prices, potentially to $1K, catalyzed by FTX creditor liquidation.
Per Matrixport, ETH revenues have been disappointing, as the coin broke below the $1,650 and $1,600 supports. Matrixport cautioned of possible decline towards and below $1,500, potentially heralding a nosedive to $1,000, based on the Ethereum ecosystem’s revenue projections.
The network mentioned FTX creditor’s altcoin sales among the primary drivers of Ether’s price dip to $1K.
Ethereum Supply Shock to Drive Plunges
FTX holds at least $90 million worth of Ethereum, translating into over 56K ETH. The injection of these myriads of ETH in the market will cause a supply shock, possibly driving the asset to $1K.
Per the report, Ethereum saw an issuance of 15K ETH last week, more than the number of tokens burned 11K. The data implies an increase in the total number of circulating ETH last week. In the last 30 days, the number of issued and burned ETH was 799K and 783K, respectively, suggesting a 0.01% growth in supply.
Throwing the FTX ETH sales into the mix alongside the already surging supply could add fuel to the fire, tipping the scales towards a forecasted price plunge.
Despite holding $3.4 billion in crypto assets, reports indicate that FTX will liquidate about $200 million weekly. This means not all the 56K ETH will be released in the market in a single shot.
As Matrixport hints of looming price declines, Ethereum has been rallying today, gaining 1.3% in the past 24 hours. ETH is currently trading at $1,613, having touched a 24-hour low of $1,539. The $1,600 mark has turned from support to resistance.
In light of Matrixport’s forecast, the more likely scenario once FTX begins to liquidate is a nosedive, thrusting ETH below the support points at $1504 and $1400 and effectively sending Ethereum towards the $1K mark.
Incoming Altcoin Crash?
Aside from Ethereum, Matrixport’s outlook predicted that other altcoins could suffer major plunges. For instance, Solana, which recently broke below the $19 support level, shows signs of further strains.
FTX currently holds approximately $685 million in Solana. Significant sell-offs have the potential to push the coin’s value below $15 and towards $10.
The firm has also expressed concern about the upcoming ApeCoin (APE) unlocks, allowing insiders to sell another 11% of the tokens this week.