Analyst Warns of Potential Ethereum Price Decline to $1,652

Ethereum has experienced a shift in its price trend, moving away from its previous bullish stance, causing concern among investors as it dropped below a critical support level.

The latest data indicates that Ethereum is currently trading at approximately $2,622, reflecting a 4% decrease over the past 24 hours. This decline follows a reaction known as “sell-the-news” in response to positive U.S. Consumer Price Index (CPI) data released on August 14th. Despite the favorable economic news, Ethereum and other cryptocurrencies have predominantly been in the red, indicating a broader market response to the information.

A detailed analysis of Ethereum’s technical indicators reveals a bearish trajectory. On August 4th, Ethereum broke out of a five-month range-bound rectangle pattern, establishing a significant resistance level at $2,933.

Efforts to surpass this resistance level on August 14th were unsuccessful for Ethereum. Additionally, an observed rising wedge pattern on the intraday chart suggests a weakening momentum and the potential for a bearish reversal, indicating a likely downturn in price.

Renowned analyst Peter Brandt has projected a potential price drop for Ethereum to $1,652. Brandt’s prediction is based on observed technical patterns and current market dynamics, with the bearish thesis only being invalidated if Ethereum surpasses $2,961.

Several technical indicators reinforce the bearish sentiment towards Ethereum. The Chaikin Money Flow (CMF) stands at -0.09, indicating selling pressure and a lack of market confidence in Ethereum. The widening of Bollinger Bands signals increased volatility during the downtrend, with Ethereum’s price transitioning from the upper band to the lower band, typically signaling a sharp bearish reversal.

Ethereum is currently holding a critical support level at $2,611, with the possibility of further price declines to the 1.618 Fibonacci level at $2,521 if this support level is breached. Market sentiment data suggests that a significant number of addresses purchased Ethereum between $2,614 and $2,800, potentially leading to additional selling pressure if Ethereum falls below these levels.

Insights from the futures market indicate a prevailing bearish sentiment among traders, with more short positions than long ones. Open Interest (OI) data reflects a 3% decrease from over $14 billion to $10 billion, indicating reduced confidence in Ethereum’s price and a shift in market sentiment.

In light of the current bearish outlook for Ethereum, investors should focus on risk management strategies, closely monitor technical indicators and support levels, stay informed about market trends and sentiment, and maintain a long-term perspective on Ethereum’s potential despite short-term challenges.