Ethereum prices are struggling to recover from last week’s local lows as whales continue to unload their holdings. Now, a symmetrical triangle for several months suggests that more pain may be coming.
summary
- The price of Ethereum has fallen by 5% over the course of this month.
- Whale selling and outflows from Spot Ethereum ETFs contributed to the downtrend.
- Several bearish patterns are forming on the daily chart.
According to data from crypto.news, Ethereum (Ethereum) price has fallen 2.5% over the past 7 days and is down 5% from this month's high of $3,292. The largest altcoin by market capitalization, trading at $3,115 at the time of writing, is down 37% from its all-time high set in August of last year.
Ethereum prices have been under pressure this month due to whale selling. According to Santiment data, the number of wallets is between 10,000 and 1 million. Ethereum It has been steadily decreasing since mid-December.
The ETH token has been in decline since mid-December of last year. ”
Source: Santiment
Large-scale token offloads by such investors often cause panic among retail holders, leading to further selling and loss of confidence.
Outflows from Spot Ethereum ETFs also didn't help. The US Spot Ethereum ETF has lost more than $345 million over the past four trading sessions, according to SoSoValue data. Weak demand from institutional investors may be holding back investment appetite from retail investors as they wait for further clarity before re-entering the market.
You may also like: World Liberty Financial launches loan market in Dolomites
On-chain statistics also indicate that Ethereum’s weak fundamentals may be weighing on the price. The total amount locked across DeFi protocols on the Ethereum blockchain has fallen to $175 billion from a September high of $257 billion, according to data from DeFiLlama.
A decline in TVL typically indicates a slowdown in network usage and capital inflows, and therefore may reflect a decline in investor confidence across the broader Ethereum ecosystem.
Derivatives traders are also losing interest. Open interest in Ethereum futures has fallen from a peak of $70 billion in August to $39 billion at the time of writing, highlighting the sharp decline in speculative positions, according to data from CoinGlass.
Since August, Ethereum's price has fallen by more than 36%.
On the daily chart, Ethereum price has formed a symmetrical triangular pattern since early November last year. A decline below the pattern's lower trendline is usually a bearish continuation signal, at least in the short term.
Ethereum price formed a symmetrical triangle and inverse cup-and-handle pattern on the daily chart — January 13 | Source: crypto.news
The chart also appears to be forming a large inverted cup and handle pattern. As shown in the chart above, the neckline of this pattern was $2,619.
Therefore, a break below the psychological support of $3,000 could pave the way for further downside, especially towards the November 21 low of $2,619, which also coincides with the neckline of the cup-and-handle pattern. Traders are likely to keep an eye on this area as a major support level.
A decisive break below this level is likely to intensify selling pressure, and Ethereum could fall to $2,121.
Conversely, if Ethereum price rebounds above the $3,269 resistance, which coincides with the 61.8% Fibonacci retracement level, it could invalidate the bearish setup and encourage a move towards higher targets.
read more: XRP price forms dragonfly parity ahead of US CLARITY law
Disclosure: This article does not represent investment advice. The content and materials published on this page are for educational purposes only.
