Ethereum has been mirroring the overall trend of Bitcoin in recent weeks. When Bitcoin experienced a dip from its 2023 peak, the price of ETH also followed suit. Subsequently, a concerning pattern known as a falling wedge pattern has emerged on the ETH chart. This observation was highlighted by crypto analyst Alan Santana, who has expressed concerns about the potential implications for Ethereum. Ethereum shows bearish falling wedge pattern. How low can the price go?
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Ethereum Falling Wedge Pattern Is Bearish
Alan Santana's analysis on the TradingView website suggests that the appearance of a falling wedge pattern does not bode well for the Ethereum price. According to the analysis, the ETH chart had formed a perfect rising wedge which eventually broke bearish. This indicates that the Ethereum price is moving alongside the rest of the crypto market in a "normal but fast correction."
The analysis is supported by the Ethereum Moving Average Convergence/Divergence (MACD) indicator, which shows a clear decline in the MACD on the daily chart, lending credence to the bearish pressure mounting on ETH.
Furthermore, the Relative Strength Index (RSI) on the daily chart also indicates a clear decline, as it has already lost its trend line support and is now moving below 50. These indicators suggest a turn toward the bearish direction for the cryptocurrency. Analyst Santana explains that the bias towards a downward spiral is strong, especially since it has already seen a double-top pattern. "Volume continues to drop, the calm before the storm. Slowly, slowly down... Nothing is happening, everything is good then Boom!" the analyst warns.
Price Targets For ETH’s Bearish Formation
From the analysis chart, the crypto analyst predicts a potential 20% drawdown for Ethereum after the double-top formation, which occurred when the asset's price briefly touched $2,400 last week. The analyst anticipates a decline to at least $1,800, with further downside potentially leading to drawdowns ending around $1,600. With Ethereum's price currently hovering around $2,200, there is ongoing bear pressure. If a breakdown occurs, Santana's prediction may materialize, causing ETH's price to fall back to mid-October levels.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.