Ethereum’s native Ether (ETH) token will likely drop below $2,000, according to a popular market analyst.
Ether paints a classic bearish continuation setup
The pseudonymous market analyst Wolf shared the downward outlook on March 7, as Ether price rallied by more than 3% to nearly $2,650, a day after testing its upsloping trendline near $2,500.
Ignoring the intraday bullish reversal, Wolf anticipated that Ether’s decline would continue further.
At the core of Wolf’s analogy was a “symmetrical triangle,” a classic technical analysis pattern that forms when price fluctuates between two converging trendlines.
In a “perfect” scenario, price breaks out of the triangle range in the direction of its previous trend. For the same reason, many analysts call symmetrical triangles a continuation pattern.
Ether has been bouncing around inside a symmetrical triangle pattern since the beginning of this year. ETH had fallen more than 50% after reaching a high in November 2021 above $4,850. As a result of the “continuation” rule, ETH’s triangle pattern seems to be skewed towards the bears.
In other words, the price can fall as much as the maximum distance between the upper and lower trend lines of the triangle after breaking out of the pattern.
As a result, Ether’s decisive move below Triangle support, if accompanied by a surge in volume, could see it test levels below $2,000 as the next downside target.
“Bulls will try to defend long-term bias, bears will try to push price to $1,800-1,900,” Wolf wrote.
ETH Accumulation Continues
Wolf’s bearish outlook for Ether came despite a recent uptick in ETH hoarding by its wealthier investors.
Ethereum addresses, which contain between 1 million and 10 million Ether, have accumulated 2.2% of the total supply of ETH minted in the last six months, according Santiment data. What’s more, the buying spree coincided with the ETH price correction, suggesting that they had been buying on the downside.
Retail traders also entered the Ethereum market during the recent Ether price correction, according to data from Glassnode. For example, the number of Ethereum addresses holding at least 0.1 ETH hit an all-time high of 6.972 million on March 7. Similarly, addresses with a minimum balance of 0.01 ETH also reached an all-time high of 21.8 million.
On the other hand, the number of addresses holding at least 1 ETH reached an all-time high of 1.42 million on February 10, but has since dropped to 1.41 million.
But many analysts remain bullish on Ether, citing the upcoming transition to proof-of-stake protocol from proof-of-work this year.. For example, Marcus Sotiriou, a market analyst at GlobalBlock, noted that the upgrade would have a “positive impact” on the price of Ether in the long term.
“This is because it should drastically reduce the cost of transactions on the Ethereum network, which is currently the main drawback of Ethereum,” he told Business Insider.
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