ethereum has followed the general trend of bitcoin over the past few weeks and when the asset fell from its 2023 peak, as did the price of eth. Following this price drop, a worrying pattern appeared on the eth chart known as a falling wedge pattern. This was brought to light by crypto analyst Alan Santana, who has painted a gloomy picture of what this could mean for ethereum.
ethereum Falling Wedge Pattern is Bearish
In the analysis published on the TradingView website, Alan Santana explains that the emergence of this falling wedge pattern does not bode well for the price of ethereum. Apparently, the eth chart had formed a perfect rising wedge that finally broke down. Given this, the crypto analyst explains that this shows that the price of ethereum is moving along with the rest of the crypto market in a “normal but rapid correction.”
The crypto analyst also backs up his analysis with the ethereum Moving Average Convergence/Divergence (MACD) indicator. In the chart shared by the analyst, there is a clear drop in the MACD on the daily chart, lending credence to the growing bearish pressure on eth.
<img decoding="async" class="aligncenter size-medium" src="https://www.tradingview.com/i/gKl5ngvs/" alt="Tradingview.com ethereum Price Chart” width=”3212″ height=”1786″ loading=”lazy”/>
Source: ethereum-s-Rising-Wedge-Leaves-No-Room-For-Doubt/">Tradingview.com
Furthermore, also using the Relative Strength Index (RSI) on the daily chart, there is also a clear decline. Apparently, the RSI has already lost the support of its trend line and is now moving below 50. The simple fact suggests a turn towards the bearish direction for the cryptocurrency.
Santana explains that these indicators show that the bias towards a downward spiral is strong, especially since a double top pattern has already been observed. “The volume continues to drop, the calm before the storm. Slowly, slowly go down… Nothing happens, everything is fine, then Boom!” warns the analyst.
<img loading="lazy" decoding="async" class="aligncenter size-medium" src="https://technicalterrence.com/wp-content/uploads/2023/12/39Ethereum-at-10000-is-scheduled39-Analyst-gives-11-reasons-why" alt="Tradingview.com ethereum Price Chart” width=”3266″ height=”1530″/>
eth price above $2,200 | Source: ETHUSD on Tradingview.com
Price Targets for Bearish eth Formation
Based on the chart published in the analysis, the crypto analyst seems to expect a drop of at least 20% for ethereum following the formation of the double top. Now, the chart shows the double top formation when the asset's price briefly touched the $2,400 level last week.
After that, expectations have quickly gone in the opposite direction and as the formation develops, the crypto analyst sees a drop to at least $1,800 from here. If further declines occur, Santana expects there will be further declines ending somewhere around $1,600.
ethereum price is still trending around $2,200 at the time of writing, suggesting that bearish pressure continues to build. If it crashes from here, then Santana's prediction could prove correct and the eth price could fall back to mid-October levels.
Featured image from crypto Briefing, chart from Tradingview.com
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