Ethereum’s native token, Ether (ETH), will likely fall below $2,000, according to a popular market analyst.
Ether paints a classic bearish continuation pattern
Wolf, pseudonymous market analyst share the downside outlook on March 7 as Ether’s price rebounded more than 3% to near $2,650, a day after testing its uptrend line near $2,500.
Ignoring the intraday upward reversal, Wolf anticipated that Ether’s decline would continue.
At the heart of Wolf’s analogy was a “symmetric triangle”, a classic technical analysis pattern that forms when price moves between two converging trend lines.
In a “perfect” scenario, the price breaks out of the triangular range in the direction of its previous trend. For the same reason, many analysts call symmetrical triangles a continuation pattern.
Ether has been bouncing inside a symmetrical triangular pattern since the start of this year. ETH had fallen over 50% after peaking in November 2021 at over $4,850. Due to the “continuation” rule, ETH’s triangular pattern appears to be biased towards bears.
In other words, the price can fall by as much as the maximum distance between the upper and lower trendline of the triangle after the exit from the pattern.
As a result, Ether’s decisive move below Triangle support – if accompanied by a spike in volume – could cause it to test levels below $2,000 as its next downside target.
“Bulls will try to defend the long-term diagonal, bears will try to push the price to $1.8k-$1.9k,” Wolf wrote.
ETH Accumulation Continues
Wolf’s bearish outlook for Ether came despite a recent surge in ETH hoarding by its wealthiest investors.
Ethereum addresses, which hold between 1 million and 10 million ETH, have accumulated 2.2% of the total ETH supply minted in the past six months, according to to Santiment data. Moreover, the buying spree coincided with the correction in ETH prices, suggesting that they had bought the dip.
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 that hold 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 hit an all-time high of 21.8 million.
On the other hand, the number of addresses holding at least 1 ETH hit an all-time high of 1.42 million on February 10, but has since declined to 1.41 million.
Related: Whale Stablecoin Buying Power Surged Over 7% in One Month: Here’s What It Means
But many analysts remain bullish on Ether, citing the upcoming transition to proof-of-stake from proof-of-work this year. For example, GlobalBlock market analyst Marcus Sotiriou noted that the upgrade would have a “positive impact” on Ether’s price in the long term.
“Indeed, this should significantly reduce the cost of transactions on the Ethereum network, which is currently the main disadvantage of Ethereum,” he said. Recount Business Insider.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.