Since early October, when Ethereum price began its plunge into bearish territory, it has struggled to regain any of its significant price levels. The Ether token failed to sustain in multiple support zones in November as it plunged.
While Ethereum appears to be gaining bullish momentum to signal an impending price reversal, a bearish continuation seems the most likely scenario after the latest decline to $3,000. A popular analyst recently released a forecast that paints a worrying picture for the second-largest cryptocurrency.
$2,400 could be the next price cushion for ETH
In a Dec. 13 post on social media platform X, market analyst Ali Martinez said marked that Ethereum price is showing an interesting sign of a potential bearish continuation in the coming weeks. 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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Usually the pattern consists of two components: the flag and the flagpole. The price initially shows a sharp downward movement and forms the flagpole. After that, there is usually a short period where the price shows an upward movement or even a sideways consolidation; this period of choppy price action constitutes ‘the flag’.
What gives the flag its integrity are its upper and lower boundaries, which serve as resistance and support zones. Since breakouts below support zones typically indicate that the market could be bearish, a failure of the flag’s support would be the necessary confirmation of the previously seen sell signal.
In the scenario where 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 previous regions may not have enough liquidity to support a significant price turnaround.
Ethereum Whales’ Realized Price of $2,400 Comes Into Sight – What to Expect
Interestingly, on-chain data adds credibility to $2,400’s reputation as a relevant price point. In a Quicktake post on the CryptoQuant platform, a pseudonymous expert, OnChain, said revealed that Ethereum is currently trading very close to a significant price level.
According to the analyst, Ethereum whales – holding at least 100,000 ETH – have typically purchased their coins around $2,400. Interestingly enough, the Ether token almost never drops to a price level close to the realized price of this group of investors.
Over the past five years, there have only been four instances where the ETH price nearly reached the purchase price of these whales before eventually making a major recovery. So if this historical pattern plays out, the second-largest cryptocurrency could have seen the beginning of another bullish rally.
At the time of writing, Ethereum has a valuation of $3,086, which reflects a 4% price drop in the past day.
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Featured image from iStock, chart from TradingView