In a recent video shared on YouTube, analyst Benjamin Cowen shared insights into the cryptocurrency market, highlighting Ethereum's price trajectory and its relationship with traditional markets as a notable point of discussion.
Since reaching its peak at $4,100 on March 12, Ethereum's price has been on a downward trend, occasionally dipping below the $3,000 mark. Currently hovering around $3,000 and confined within a descending triangle pattern, Ethereum faces the risk of further decline, particularly if it breaks below the $2,800 support level, potentially triggering a more significant price drop.
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Potential Factors Driving Ethereum's Price Downward
According to Cowen, two primary catalysts for the potential decline in the price of Ethereum (ETH) are the rejection of ETH exchange-traded funds (ETFs) and the monetary policy of the United States. He suggests that the impact of these factors on the market could lead to tighter monetary conditions, with investors potentially attributing the resulting price drop to the rejection of ETH ETFs and subsequently reacting by selling their holdings.
Source: Benjamin Cowen
However, Cowen also highlights significant indicators on the price chart that hint at a notable price decline. Specifically, he references a breakout below horizontal support on the ETHBTC pair, noting similar occurrences in the past.
In both October 2016 and September 2019, when such a breakout occurred, the price of Ethereum experienced a substantial decline of around 70%. This pattern repeated on March 11 of this year, serving as a cautionary signal for potential investors.
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Ethereum's Price Outlook: Navigating the Triangle and Its Impact on Current Prices
Following its peak at $4,100 on March 12, Ethereum displayed signs of weakness, forming a descending triangle pattern. While this pattern could represent a corrective phase with ABCDE waves counted, suggesting the potential beginning of the next bullish cycle, there's also a bearish scenario in which ETH is on a trajectory towards its ascending support level of $2,800. Should Ethereum reach this support level, a breakout to the downside could occur.
Source: Nikola Lazic on TradingView
As Ethereum's price approaches the apex of the triangle, the direction of the breakout will determine its future trajectory. If the price is indeed in a corrective phase, the rise observed from May 1 will mark the commencement of an upward trend, with the lower boundary set at $2,800.
However, a breach below this level would suggest that Ethereum hasn't undergone an ABCDE correction. In such a scenario, descending into the lower range could expose ETH to further downside risk, with the next target area around $2,100.
For current prices, Ethereum's movement within the descending triangle pattern and its proximity to the $2,800 support level are critical factors to monitor. A breakout above the triangle's upper boundary could signal a continuation of the bullish trend, potentially leading to a retest of previous highs.
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Conversely, a breakdown below $2,800 would indicate increased selling pressure and the potential for further price declines, possibly towards the $2,100 support level. Traders and investors should closely watch these key levels for insights into Ethereum's short-term price direction.
See more: Cryptocurrency Prices and Market Cap
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