Ether prices have been struggling recently, falling steadily, failing to win a prominent comeback after peaking late last month.
According to Coinbase data from TradingView, on Monday, September 8th, the world's most valuable digital currency was traded primarily by total market capitalization, which was primarily traded between $4,300 and $4,400 on Monday, September 8th.
In comparison, cryptocurrency exceeded $4,900 on August 24th, with additional Coinbase figures revealed. As a result, digital assets fell by about 14% from that time on Saturday, September 6th.
When explaining this downward price movement, analysts cited several developments, including the acquisition of profits and the decline in market sentiment.
“The recent decline in Ethereum has been driven technically, with traders and investors making profits near the 2021 high after nearly tripling from the low in April.”
Joe Dipasquale, CEO of Bitbull Capital, Cryptocurrency Hedge Fund Manager, also showed weight.
“The etheric pullback appears to have taken advantage of profit after a rapid run that recorded highs and wider weaknesses in the overall risky assets as rate cut expectations are pushed back,” he said through an email commentary.
“Positioning was busy along the way, so even modest macro jitter and light ETF influx were enough to trigger sales. This kind of retracement is natural after a strong gathering and does not necessarily signal the breakdown of long-term bullish trends,” added DiPascuare.
Brett Sifling, wealth manager at Gerber Kawasaki Wealth & Investment Management, offered two cents on the situation.
“It is natural for market participants to benefit when assets are generating historic bests, but ether was seen larger than usual in late August, which appears to be a largely overcovered position that has been closed at the top.
“Another reason for the possibility of stagnating rallying is that network revenues fell sharply in August ($25.6 million to $14.1 million), primarily due to recent upgrades to Ethereum, which reduced fees through layer-2 scaling,” continued Sifling. “Some people point this news to us as a red flag that is causing concerns about the network's long-term sustainability.”
“Last week, ether ETFs were registered higher than normal redemption, so the institution's sentiment began to cool down.”
The YouTuber, who Wendy O's “all market sentiment has been declining significantly,” said Shiffling not only underscored the way investors think, as “many buyers feel exhausted and have run out of capital when it comes to retail.”
Despite these developments, she offered a very optimistic view of the future outlook for digital currency, saying, “However, the good news is, in the long run, Ethereum looks incredibly bullish for basic reasons.”
She added that in the short term, the situation could improve if future Federal Open Market Committee meetings result in reduced rate cuts on federal funds.
Potential bearish patterns
According to Tim Enneking, Psalion's managing partner, Ether's recent price movement can be interpreted as a descending pennant layer.
“The pennant chart pattern is a continuing signal for technical analysis, consisting of integration periods with flagpole and convergent trend lines, which generally converge trend lines that last from one to three weeks,” Investopedia said.
“Strangely, if ATH is considered abnormal on August 24th, ETH has been steadily decreasing since August 13th,” Enneking said in an email.
“The most optimistic interpretation is that ETH is at a very solid bottom just above $4,200 (ignoring the short-lived DIP that fell below that level on August 19th just before the ATH),” he pointed out.
“You can consider a pattern as a descending pennant, meaning that you need another $4,200 break, and you'll see three handles, but you'll see $5K right away,” Enneking said.
The chart below can help explain the potential formation of this pattern.
“Of course, all of this background is that September is easily the worst month for both the Fiat and crypto markets, with some people walking on the eggshells especially with the US Fed's interest rate decision coming next week,” he concluded, highlighting both the market history and expectations surrounding the Fed's next policy meeting.
