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The Ethereum price is at risk of a “bear flag” breakdown and a 20% decline vs Bitcoin

After experiencing 11 weeks of uninterrupted losses, Ethereum funds are experiencing a modest rebound.

Since December 2021, Ethereum’s native token, Ether (ETH), has down approximately 40 percent against Bitcoin (BTC). On the other hand, a typical technical indication suggests that the ETH/BTC pair could experience further declines in the weeks ahead.

 

Price of Ethereum risks technical breakdown

On the three-day timescale, the ETH/BTC chart has been forming a bear flag since early June 2022.

Bear flags are bearish continuation patterns that occur when the price consolidates higher inside a range indicated by two parallel ascending trendlines following a strong decrease. After the price breaks below the lower trendline, i.e. in the direction of the preceding decline, they are resolved.

As a rule of technical analysis, the downside target of a bear flag is equivalent to the size of the last downward movement. Recently, ETH/BTC has been anticipating a similar fall, with a profit target of 0.0439, about 20% below the current price.

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According to a study by Samurai Trading Academy, bear flags have an average success record of 67 percent when it comes to fulfilling profit targets. In addition, renowned analyst Tom Bulkowski predicts that the bear flag will only succeed 46 times out of 100 attempts.

 

This resembles “real death”

Ether may go significantly lower than the profit objective indicated by the bear flag, according to a distinct technical setup revealed by expert Pentoshi.

Pentoshi indicates that ETH/BTC might fall to a trendline that has served as support since September 2019 — the level is near 0.036, which is 30 percent lower than the current price.

Funds in Ethereum have limited inflows.

In contrast to the bearish scenarios for ETH/BTC, it appears that Ethereum-based investment funds may recover.

According to the most recent data from CoinShares, Ethereum-based funds accumulated $7.6 million in the week ending July 8.

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The study notes: “The inflows show a minor turnaround in attitude after 11 consecutive weeks of outflows that took 2022 outflows to a height of $460 million.”

This change in mood may be attributable to the likelihood that the Merge, where Ethereum transitions from proof-of-work to proof-of-stake, will occur later this year.

 

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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