Ethereum USD Chart Flashes Huge Warning Sign to $1,100: Is a Brutal ETH Flush Incoming?
Ether Bear Pennant Targets $1,100 – Is ETH Crash Incoming?
Ethereum USD just flashed a major technical warning signal, leaving traders fearing increased downside risk. ETH dropped a further -0.6% overnight and is currently trading for $1,980, struggling to regain its key $2,000 level.
The Vitalik Buterin-led crypto asset has printed a classic “bear pennant” on the daily chart, a formation that often precedes a sharp correction in spot prices. If the pattern resolves as technical analysts predict, ETH could face a brutal flush down to $1,100, a level not seen since November 2022.
As market sentiment continues to waver, the question remains whether bulls will step in in time to stop the bear pennant playing out.
Right now, things aren’t looking too promising: every green candle on the Ethereum USD chart is being sold off, and the Fear & Greed Index is still at 9/100, or ‘Extreme Fear’, highlighting investors’ hesitancy.
What the Bear Pennant Signals for Ethereum USD Price Action
For those familiar with charting patterns, the bear pennant is a continuation setup akin to a market “pause” before a trend resumes its downward trajectory. Following a sharp decline (the flagpole), the price consolidates in a narrowing triangle (the pennant).
Crypto Twitter trader @Degen_Hardy is one of many analysts who have spotted the current setup on the daily ETH chart, which suggests bullish momentum is fading rapidly.
The pennant will resolve once the price breaks below the lower trend line at around $1,950. If this happens, the Ethereum USD pair could drop by as much as the previous downtrend’s height.
This would place the measured target for ETH at $1,100, which would amount to a loss of -43% in value from its current price of $1,980
Ethereum is currently stuck between narratives, struggling to maintain its premium status as on-chain transaction volume dwindles.
Without significant buy-side volume to break the upper trendline, the path of least resistance remains downward, with the $1,100 target derived from the height of the previous crash.
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Falling Network Activity Not Helping the Ethereum Chart
This technical weakness is currently exacerbated by fundamental issues, most notably, a sharp drop in network activity.
The Ethereum price weakness is reflected heavily in its on-chain activity, with the network’s daily transaction count dropping to 1.95M yesterday (February 18), down -33% from 2.9M just two weeks ago, on February 5.
Worryingly, a similar sharp drop in Ethereum’s daily transaction count occurred in January 2024, followed by a -40% decline in the ETH USD price, which fell from $3,600 to $2,270 in less than three months.
If you’re an ETH holder, look away now, as evidence of the network’s decline doesn’t stop there. Looking at the TVL (Total Value Locked) on Ethereum, DefiLlama data shows it has dropped to $54.2Bn as of today, down from $70Bn at the beginning of February, a 22% drop in just a few weeks.
Can Institutions Save the ETH Chart and Avoid the Brutal Flush?
Right now, on-chain metrics and bearish chart patterns point to an imminent brutal crash for Ethereum USD. However, the only glimmer of hope for ETH maxi’s right now is institutions.
While the average retail investor is capitulating, selling ETH at or below $2,000 out of fear, institutions are seemingly buying every dip.
Tom Lee and his Ethereum Treasury Strategy firm, Bitmine (BMNR), continue to stack Ethereum, now holding over 4.3M, valued at $8.6Bn with current prices.
And less than a week ago, the world’s largest asset manager, BlackRock, with over $11 trillion in AUM (assets under management), increased its exposure to Bitmine, buying a further 9M shares, valued at just under $18M.
Finally, there is the growing Ethereum ETF sector, which is currently valued at over $12.9Bn, according to CoinGlass data. While flows continue to flip-flop between green and red on each day, the overall trend for these spot ETF products is bullish.
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