Ethereum risks falling below $2000 USD

Ethereum is at risk of crashing below $2000 USD as a bearish “symmetrical triangle” emerges

The downside outlook emerges as Ethereum billionaire addresses continue to pile up ETH supply. Ethereum’s native token, Ether (ETH), will likely fall below $2000 USD, according to a popular market analyst.

Ethereum is drawing a classic bearish continuation pattern

Pseudonymous market analyst Wolf shared the downside outlook on March 7 as Ether price rebounded more than 3% to nearly $2650 USD, a day after testing its rising trendline nearly $2500 USD. Ignoring the intraday upward reversal, Wolf anticipated that Ethereum’s decline would continue.

Ethereum (ETH/USD) daily chart

Source: Trading View

At the heart of Wolf’s analogy was a “symmetrical 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.

Etherum has been bouncing inside a symmetrical triangle pattern since the beginning of this year. ETH had fallen over 50% after peaking in November 2021 at over $4850 USD. Due to the “continuation” rule, the triangle pattern appears to be biased towards the bears.

Ethereum (ETH/USD) chart with a symmetrical triangle pattern

ethereum 07032022
Source: Trading View

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, Ethereum’s decisive move below the Triangle support – if accompanied by a spike in volume – could cause it to test levels below $2000 USD 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 Ethereum 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 supply of ETH minted in the past six months, according to the data of Santiment. Moreover, the buying spree coincided with the correction in ETH prices, suggesting that they had bought the dip.

Ethereum Supply Distribution

eth supply 07032022
Source: Santiment

Independent traders also entered the Ethereum market during the recent 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 hit an all-time high of 21.8 million.

Number of Ethereum addresses with balance of at least 0.1 ETH

ethereum glassnode
Source: Glassnode

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.

But many analysts remain bullish on Ethereum, 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 the price of Ether in the long run.

“Indeed, this should significantly reduce the cost of transactions on the Ethereum network, which is currently the main disadvantage of Ethereum,” he said. declared at Business Insider.

By Yashu Gola, Cointelegraph

Yashu Gola is a Mumbai-based financial analyst who has covered the cryptocurrency industry since 2014. Prior to his career in journalism, Yashu was a security analyst at Premiershield and an editor at Appin Technology.

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The opinions expressed here are solely those of the author and do not necessarily reflect the views of Forex Quebec. Every investment and trading move involves risk, you should do your own research when making a decision.

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