Since December 2021, Ethereum’s native token Ether (ETH) has fallen nearly 40% against Bitcoins (BTC). Based on a traditional technical indicator, ETH/BTC could suffer even more losses in the weeks ahead.
Technical breakdown of Ethereum’s price is possible
Since June 20,22, the ETH/BTC chart formed a bear flag on the three-day timeline.
Bear flags can be described as continuation patterns of bearishness that occur when the price consolidates higher within a range defined after a sharp fall by two ascending parallel trendlines. These patterns resolve when the price breaks below the lower trendline (i.e. in the direction it was previously downtrending).
Technical analysis dictates that a bear flag’s downside target should be the same length as the previous downside move. ETH/BTC has been looking for a similar breakdown in recent months, with its profit target at 0.0439, which is almost 20% lower than today’s price.
ETH/BTC price chart for three days featuring the “bear flag pattern”. Source: TradingView
Samurai Trading Academy’s study shows that bear flags still have a 67% success rate in meeting profit targets. Tom Bulkowski, a veteran analyst, sees the bear flag reaching its target 46 times out 100 attempts.
Looks like “actual death”
Analyst Pentoshi shared a separate technical setup that shows Ether at risk of falling below the bear flag profit target.
Pentoshi suggests that ETH/BTC may dip towards an ascending trendline, which has been its support since September 2019, the level is close to 0.036, which is 30% lower than today’s price.
$ETH / $BTC looks like actual death is at the doorstep https://t.co/giJJgUDdzJ pic.twitter.com/NBEzWDx2Ks
— Pentoshi (@Pentosh1) July 12, 2022
Inflows to Ethereum funds are modest
Contrary to the bearish setups of ETH/BTC, there is a possibility for a recovery across Ethereum-based investments funds.
Related: Three key metrics indicate that Bitcoin and the wider cryptocurrency market are on the verge of further fall
According to CoinShares’ most recent report, Ethereum funds have amassed $7.6 millions in the week ended July 8.
By asset, net U.S. dollars flow into and out of crypto-based funds. Source: CoinShares/Bloomberg
The report states that inflows indicate a slight turnaround in sentiment after 11 weeks of outflows, which brought 2022 outflows up to a peak at $460 million.
“This increase in sentiment may be due the increasing likelihood of the Merge, when Ethereum moves from proof–of-work into proof–of-stake. This will happen later this year. You should do your research before making any investment or trading decision.
Eileen Wilson –Technology and Energy
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