Ethereum has followed Bitcoin’s general trend over the past few weeks, with the asset ETH price has also declined compared to the 2023 high. Following this price drop, a worrying pattern, known as a descending wedge pattern, appeared on the ETH chart. This was revealed by cryptocurrency analyst Alan Santana, who painted a bleak picture of what this means for Ethereum.
Ethereum falling wedge pattern is bearish
In an analysis published on the TradingView website, Alan Santana explains that the emergence of this descending wedge pattern does not bode well for the Ethereum price. Clearly, the ETH chart formed a perfect rising wedge, which eventually broke the bearish trend. Given this, the cryptocurrency analyst explains that this shows that Ethereum’s price is moving along with the rest of the cryptocurrency market with a “normal but rapid correction.”
Cryptocurrency analysts also use the Ethereum Moving Average Convergence/Divergence (MACD) indicator to support their analysis. The chart shared by the analyst shows that the MACD on the daily chart is clearly falling, which gives credence to the bearish pressure being exerted on ETH.
Source: Tradingview.com
Moreover, even using the relative strength index (RSI) on the daily chart, there is a clear downward trend. RSI appears to have already lost trendline support and is currently moving below 50. The simple fact is that cryptocurrencies are taking a bearish turn.
Santana explains that these indicators show a strong bias towards a downward spiral, especially since we have already seen a double top pattern. “Volumes continue to decline and it is the calm before the storm. Slowly, slowly… If nothing happens and everything gets better, boom!” Analysts warn:
ETH price above $2,200 | Source: ETHUSD on Tradingview.com
Price Target for Bearish Formation in ETH
From the charts posted on Analytics, it appears that cryptocurrency analysts expect Ethereum to fall at least 20% following the formation of a double top. The chart now records a double top formation when the asset’s price briefly touched the $2,400 level last week.
Expectations then quickly shifted in the opposite direction, and as the formation progresses, cryptocurrency analysts see a decline to at least $1,800 from here. If further declines follow, Santana expects there to be more declines, ending around $1,600.
As of this writing, the price of Ethereum is still hovering around $2,200, suggesting that bearish pressure is still mounting. A breakdown here could prove Santana’s prediction correct and send ETH prices down to mid-October levels.
Featured image from Crypto Briefing, Chart from Tradingview.com
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