Ethereum Price Faces Potential 48% Drop to $1,200 Amid Wedge Formation Similar to 2019

Ethereum’s recent struggles to bounce back from its weekly lows have raised concerns among market analysts, who see parallels with past performance indicating potential further declines. Benjamin Cowen, the founder of IntoTheCryptoverse, conducted a detailed analysis comparing Ethereum’s wedge formation in 2019 and 2024.

In 2019, Ethereum exhibited a wedge pattern characterized by progressively higher lows at key levels of $81.21, $102.65, $149.31, and $191.37. This wedge pattern preceded a significant downturn, with Ethereum eventually dropping below the wedge after the Federal Reserve’s rate cut. The subsequent price declines culminated in the ETH/BTC pair hitting a bottom, marking the end of the downtrend and the start of a new upward trend.

Fast forward to 2024, Ethereum has formed another wedge pattern, with higher lows compared to 2019. The current cycle has seen lows at $886, $1,069, $1,515, and the most recent level near $1,954. Interestingly, Ethereum has retraced back into the wedge ahead of the anticipated 2024 rate cut, echoing the 2019 pattern. This similarity suggests a potential breakdown below the wedge, indicating further downward pressure.

Benjamin Cowen predicts that Ethereum could reach a fresh bottom near $1,200 by December 2024, based on historical data from 2016 and 2019, where Ethereum underwent a 70% decline under similar market conditions. He envisions the $1,200 level as a potential landing point before a market upturn in the first half of 2025. With ETH currently trading at $2,342, a drop to $1,200 would signify a substantial 48% crash.

Recent whale activities have exacerbated bearish sentiment around Ethereum, with on-chain data revealing significant transfers from foundation wallets to multi-signature wallets. These activities, including a transfer of ETH valued at $2.38 million, following a previous transfer of 35,000 ETH worth over $94 million to the Kraken exchange, have raised concerns about the potential impact of these sales on the market’s future trajectory.

In conclusion, Ethereum’s price structure and historical patterns suggest the possibility of further downside risks, with analysts like Benjamin Cowen pointing towards a potential breakdown below the wedge formation and a projected bottom near $1,200 by the end of 2024. Traders and investors are advised to conduct thorough research and exercise caution in light of these market dynamics.