Ethereum Price Prediction: Analyst Warns of Potential Drop to $1652

Ethereum is facing challenging times as technical indicators point towards a potential bearish trend for the cryptocurrency. The recent bearish breakout below the 5-month rectangle pattern has raised concerns about Ethereum’s future price movements. Despite holding onto a critical support level at $2,611, the short-term sentiment remains bearish.

The release of positive U.S. Consumer Price Index (CPI) data on August 14 led to a sell-off in the crypto market, with Ethereum dropping by 4% to trade at $2,622 at the time of writing. Analyst Peter Brandt highlighted Ethereum’s bearish outlook after the completion of a five-month rectangle pattern, with a key resistance level forming at $2,933.

Following a failed attempt to rally past this resistance, Ethereum’s price action exhibited a rising wedge pattern on the intraday chart, signaling weakening momentum and a potential bearish reversal. Brandt predicted a drop to $1,652, backing his analysis with a short position targeting this price level. However, he noted that this bearish scenario would be invalidated if Ethereum managed to move above $2,961.

Technical indicators further support the bearish thesis around Ethereum. The Chaikin Money Flow (CMF) indicator, currently at -0.09, indicates selling pressure, while the flat CMF suggests a lack of market confidence and reluctance from buyers to open new positions. Additionally, the widening Bollinger bands reflect rising volatility during the downtrend, with the price moving from the upper band to the lower band, indicating a sharp bearish reversal.

Ethereum’s crucial support at $2,611 is being closely monitored, with a potential drop to the 1.618 Fibonacci level at $2,521 if this support level fails. Notably, price levels between $2,614 and $2,800 are critical as many addresses that bought at these levels are currently “At the Money,” suggesting a significant zone of interest for traders.

In the futures market, traders are increasingly betting against Ethereum, as evidenced by the Long/Short Ratio standing at 0.90 at the time of writing. This ratio indicates a higher proportion of traders taking short positions over long positions. Moreover, Open Interest (OI) for Ethereum has seen a 3% decline, dropping from over $14 billion to $10 billion, indicating waning confidence among futures traders in Ethereum’s price trajectory.