Ethereum price risks “bear flag” collapse, 20% fall against Bitcoin
Ethereum’s original token, Ether (ETH), is down almost 40% against Bitcoin (BTC) since December 2021. But even more pain is possible for the ETH / BTC pair in the coming weeks, based on a classic technical indicator.
Ethereum price risks technical collapse
The ETH / BTC chart has formed a bear flag since the beginning of June 2022 on the three-day time frame.
In detail, bear flags are considered bearish continuation patterns that are formed when the price is consolidated higher within an area defined by two rising, parallel trend lines after a sharp decline. They resolve after the price breaks below the lower trend line, ie in the direction of their previous downtrend.
As a rule for technical analysis, the downside dimension of a bear flag will be equal in length to the size of the previous downside. Recently, ETH / BTC has seen a similar collapse, with its profit target of around 0.0439, down almost 20% from today’s price.
Nevertheless, bear flags have an average success rate of around 67% when it comes to meeting profit targets, according to the Samurai Trading Academy’s study. In addition, veteran analyst Tom Bulkowski sees that the bear flag reaches the goal only 46 times out of 100 attempts.
Looks like “actually dead”
A separate technical setup shared by analyst Pentoshi shows that Ether faces the possibility of falling much lower than the bear flag’s profit target.
Pentoshi suggests that ETH / BTC may fall against a rising trend line that has served as support since September 2019 – the level comes close to 0.036, down 30% from today’s price.
$ ETH / $ BTC looks like the actual death is on the doorstep pic.twitter.com/NBEzWDx2Ks
– Pentoshi (@ Pentosh1) July 12, 2022
Ethereum funds are witnessing modest inflows
The bearish set-ups for ETH / BTC seem to contrast with a potential recovery across Ethereum-based investment funds.
Related: 3 key figures suggest that Bitcoin and the broader crypto market need to fall further
In detail, Ethereum funds raised $ 7.6 million in the week ending July 8, according to CoinShares’ latest report.
“The inflows suggest a modest turnaround in sentiment, after going through 11 consecutive weeks of outflows that brought the outflows in 2022 to a peak of $ 460 million,” the report notes, adding:
“This improvement in sentiment may be due to the growing likelihood of the merger, where Ethereum is moving from proof-of-work to proof-of-effort, which is happening later this year.”
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