Ethereum Price at Risk? Bearish Chart Patterns Warning
Ethereum (ETH), the world’s second-largest cryptocurrency by market capitalization, appears bearish and poised for a price drop. Reasons include how ETH lags behind top assets like Bitcoin (BTC) and Solana (SOL), its current price action formation, the latest sell-off by whales, and more.
Ethereum (ETH) shows weakness
Whales and investors have sold off a lot of ETH in recent days due to stable and lackluster performance compared to other assets. recent, Coin Encyclopedia According to reports, a dormant whale held 398,889 ETH, worth $1.34 billion, and sold 73,356 ETH, worth $224 million.
This notable sell-off created potential selling pressure on the asset and caused a change in user sentiment.
Ethereum technical analysis and future prospects
According to expert technical analysis, ETH is currently exhibiting a bearish double top price action pattern with bearish divergences on both the daily and four-hour charts. Historically, when an asset forms these patterns, it often experiences significant price declines.
Based on current price action, if ETH closes the four-hour candle below the $3,250 level, there is a good chance of an 8% drop to reach $3,010 levels in the coming days.
The asset is currently trading above the 200 exponential moving average (EMA) on the daily time frame, indicating an uptrend. Meanwhile, its relative strength index (RSI) suggests the asset still has room for price gains in the coming days.
The bearish outlook for ETH will be invalidated if it breaks out and closes the four-hour candle above $3,400.
On-chain indicators point to weak sentiment
As of now, ETH’s on-chain indicators support its bearish outlook. According to on-chain analytics firm coin glassETH’s long-short ratio is 0.90, reflecting traders’ strong bearish sentiment.
Furthermore, its open interest fell by 5.4% in the past 4 hours and by 1.75% in the past 24 hours. The drop in open interest indicates that traders are losing interest in ETH, causing open positions to be liquidated.
Current Price Momentum
Currently, ETH is trading near $3,315, with the price down 2.1% in the past 24 hours. During the same period, its trading volume fell by 29%, indicating that trader participation was lower than the previous day.
