The crypto market is experiencing a correction with Bitcoin and Ethereum giving back their gains from previous weeks. The general sentiment in the sector was optimistic but could take a blow if main cryptocurrencies lose their current levels.

At the time of writing, Ethereum (ETH) trades at $1,690 with a 10% loss in the last 24 hours and 7 days, respectively. The cryptocurrency has preserved a critical support zone at $1,700 that was turned from major resistance into support.

In a market update, BitMEX Founder Arthur Hayes called the short-term price action across the crypto market “ugly” as he sees potential for further losses. Hayes said via Twitter:

The short-term price action is ugly. Assuming you are long, it could mean you read the market wrong. Is it time to cover, sit tight, or add more? That all depends on your nerve and how well you can read the chart.

In the short term, a trader might experience losses, but if the trader is playing the long run on Ethereum, Hayes believes nothing has “fundamentally change” for the second cryptocurrency by market cap. In less than a month, Ethereum is set to deploy “The Merge” on mainnet.

This event will signal ETH’s full transition into a Proof-of-Stake (PoS) blockchain. In what is one of the most expected events in the history of the crypto market, Ethereum will set the stage for a less energy-consuming, more scalable, and accessible network.

In the past, Hayes has said that “The Merge” will be a transcendental event for ETH’s price as the cryptocurrency will manage to attract fresh capital. The BitMEX founder believes that once the blockchain reduces its energy consumption, sidelined money will flow and potentially push ETH’s price higher. Hayes said:

If you tell me the $ETH merge ain’t happening, or something occurred which severely diminishes it’s probability of success then I would be worried about my long position.

In that sense, traders should keep an eye on “The Merge” and any potential hurdles as they can negatively affect the price of Ethereum. At the time of writing, the update is on track, but ETH’s price must maintain its current levels to prevent further downside.

If bears take control of the market, analyst Justin Bennet believes that the price of Ethereum might find a bottom at $300. Bennett said:

Unpopular opinion: The $ETH bottom is probably closer to $300 than $1,000. “That’ll never happen,” they’ll say. It already did during the last #crypto bear market. And that was without a global recession, a bear market for stocks, and inflation ripping to new highs in many developed countries.

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