Since early October, when Ethereum price began to dip into bearish territory, it has struggled to regain its important price levels. The Ether token failed to hold at several support zones throughout November as it plunged lower.
While Ethereum appears to be gaining bullish momentum to signal an imminent price reversal, a bearish continuation appears to be the most likely scenario following the latest drop to $3,000. A popular analyst recently presented a prediction that paints a worrying picture for the second largest cryptocurrency.
$2,400 could be the next price cushion for ETH
In a December 13 post on social media platform Martinez’s analysis was based on the bear flag pattern, a technical analysis pattern often used to confirm the continuation of a downtrend.
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Typically, the design has two elements: the flag and the flagpole. The price initially shows a strong downward movement, forming the flagpole. Then there is usually a brief period where the price shows an upward movement or even a sideways consolidation; this period of unstable price action constitutes “the flag”.
What gives the flag its integrity are its upper and lower boundaries, which serve as areas of resistance and support. Since breaks below support areas generally indicate that the market could be bearish, a failure of flag support would then be the necessary confirmation of the previously observed sell signal.
In case this happens, the crypto expert pointed out that Ethereum’s possible target could be the $2,400 price level. This is likely the case because all of the previous regions may have insufficient liquidity to allow for a significant price reversal.
Ethereum Whales $2,400 Realized Price in Sight – What to Expect
Interestingly, on-chain data adds credence to the reputation of $2,400 as a relevant price level. In a Quicktake article on the CryptoQuant platform, a pseudonymous expert, OnChain, revealed that Ethereum is currently trading very close to an important price level.
According to the analyst, Ethereum whales – with holdings of at least 100,000 ETH – have mostly purchased their coins at almost $2,400. Interestingly, the Ether token rarely falls to price levels close to the price realized by this group of investors.
Over the past five years, there have only been four instances where the price of ETH nearly reached the acquisition price of these whales, before experiencing major rallies. If this historical pattern holds true, the second largest cryptocurrency could have experienced the start of a new bullish rally.
At the time of writing, Ethereum holds a valuation of $3,086, reflecting a 4% price drop over the past day.
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Featured image from iStock, chart from TradingView
