As Ethereum billionaire addresses continue to accumulate ETH supply, the gloomy view develops.
According to one famous market analyst, Ethereum’s native token, Ether (ETH), will certainly go below $2,000 in the near future.
Ether depicts a traditional bearish continuation pattern.
On Monday, as Ether’s price rebounded by over 3% to nearly $2,650, a day after testing its upward sloping trendline near $2,500, pseudonymous market analyst Wolf shared the bearish outlook.
Wolf predicted that the Ether’s fall would continue despite the intraday positive reversal.
A “symmetrical triangle,” a famous technical analysis pattern that emerges when the price varies between two converging trendlines, was at the heart of Wolf’s analogy.
The price breaks out of the triangular range in the direction of its prior trend in a “perfect” scenario. Many analysts refer to symmetrical triangles as a continuation pattern for the same reason.
Since the beginning of the year, Ether has been bouncing inside a symmetrical triangle pattern. After peaking at over $4,850 in November 2021, ETH had dropped by more than 50%. ETH’s triangle pattern appears to be skewed toward the bears as a result of the “continuation” rule.
In other words, after breaking out of the pattern, the price can fall as much as the maximum distance between the triangle’s upper and lower trendlines.
As a result, if Ether’s definitive move below the Triangle support is accompanied by a surge in volume, the next downside target might be levels around $2,000.
“Bulls will attempt to defend the long-term diagonal, while bears will attempt to drive the price to $1.8-1.9k,” Wolf wrote.
The accumulation of ETH is continuing.
Wolf’s gloomy view for Ether comes despite a recent increase in ETH holdings among the world’s wealthiest investors.
According to data from Sentiment, Ethereum addresses holding between 1 million and 10 million Ethers have accumulated 2.2 percent of the entire ETH supply produced in the last six months. Furthermore, the buying binge corresponded with ETH’s price adjustment, implying that they were taking advantage of a price drop.
According to Glassnode data, retail traders also entered the Ethereum market during the recent price fall. On March 7, for example, the number of Ethereum addresses holding at least 0.1 ETH hit an all-time high of 6.972 million. Similarly, the number of addresses with a minimum balance of 0.01 ETH hit a new high of 21.8 million.
On the other hand, on Feb. 10, the number of addresses holding at least one ETH reached an all-time high of 1.42 million, before falling to 1.41 million.
Many analysts, though, remain bullish on Ether, citing the planned switch from proof-of-work to proof-of-stake later this year. For example, Marcus Sotiriou, a market analyst at GlobalBlock, believes that the upgrade will have a “long-term favorable influence” on Ether’s price.
He told Business Insider, “This is because it should drastically cut the cost of transactions on the Ethereum network, which is now Ethereum’s biggest downside.”
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.