Ethereum in danger of 25% crash as ETH price forms classic bearish technical pattern

Ethereum's autochthonal token Ether (ETH) looks acceptable to acquisition a breakdown determination successful May arsenic it forms a convincing "bear pennant" structure.

ETH terms to $1,500?

ETH's terms has been consolidating since May 11 wrong a scope defined by 2 converging trendlines. Its sideways determination coincides with a driblet successful trading volumes, underscoring the anticipation that ETH/USD is coating a carnivore pennant.

Bear pennants are bearish continuation patterns, meaning they resoluteness aft the terms breaks beneath the structure's little trendline and past falls by arsenic overmuch arsenic the tallness of the erstwhile determination downside (called the flagpole).

ETH/USD two-hour terms chart. Source: TradingView

As a effect of this method rule, Ether risks closing beneath its pennant structure, followed by further moves to the downside.

The tallness of ETH's flagpole is astir $650. Therefore, if the terms undergoes breakdown astatine the pennant's apex constituent adjacent $2,030 past the structure's bearish people volition beryllium beneath $1,500, down implicit 25% from today's price.

Sell-off, pullback

Interestingly, the carnivore pennant's nett people falls into the country that preceded a 250% terms rally successful the February-November 2021 session. Also, the people is astir Ether's 200-week exponential moving mean (200-day EMA; the bluish wave), presently adjacent $1,600.

Ideally, the request portion could punctual Ether traders to accumulate the tokens successful anticipation of a crisp upside retracement.

Suppose it happens, past ETH's terms interim nett people would apt beryllium the multi-month downward sloping trendline that has served arsenic absorption successful a "falling channel" pattern, arsenic shown successful the illustration below.

ETH/USD play terms chart. Source: TradingView

ETH has already been rebounding aft investigating the request portion (and the falling channel's little trendline) arsenic support. This could propulsion ETH/USD to scope the channel's precocious trendline adjacent $3,000, astir 50% supra today's price, by June.

Extended breakdown scenario

The worst-case script could beryllium ETH breaking beneath the request zone, led by macro risks and their interaction connected the crypto marketplace truthful acold successful 2022.

Related: $1.9T wipeout successful crypto risks spilling implicit to stocks, bonds — stablecoin Tether successful focus

Notably, Ether has declined by implicit 50% quarter-to-date arsenic investors trim their vulnerability to the riskier assets, including Bitcoin (BTC) and tech stocks, successful a higher involvement complaint environment.

As Cointelegraph has reported, anticipations of further banal marketplace selloffs could measurement connected cryptos, frankincense hurting Ether, Bitcoin, Cardano (ADA), and others successful tandem.

Ethereum's correlation coefficient with tech-heavy Nasdaq 100 is astatine 0.90. Source: TradingView

BOOX Research, a fiscal blogger astatine SeekingAlpha, remains semipermanent bullish connected Bitcoin, Ethereum, and the broader crypto marketplace but believes a betterment mightiness instrumentality respective years. Excerpts from its note:

"While immoderate of the corrections from the apical whitethorn person simply shaken retired the 'hot money,' determination is inactive a hazard that a deteriorating macro situation opens the doorway for adjacent deeper losses."

The views and opinions expressed present are solely those of the writer and bash not needfully bespeak the views of Cointelegraph.com. Every concern and trading determination involves risk, you should behaviour your ain probe erstwhile making a decision.