Ethereum (ETH) has been incurring significant selling pressure over the past couple of weeks, mirroring the bearish price action that Bitcoin has been facing in the time since it plummeted from its recent highs of $10,600.
Analysts are now noting that Ethereum may be positioned for significantly further losses in the near-term, with one analyst setting a target in the upper-$120 region – which may be supported by the fact that the fourth quarter of the year is historically when ETH sees its largest losses.
Ethereum Plummets 8% as Bitcoin Breaks Below $7,000
At the time of writing, Ethereum is trading down over 7% at its current price of $148.70, which marks a major retrace from its daily highs of over $160.
Ethereum has been caught within a firm downtrend ever since it failed to break above $190 earlier this month, and it is important to note that it has been unable to garner any significant upwards momentum in the time since it was rejected at $190, which has been largely due to its close correlation with Bitcoin.
Earlier today, the cryptocurrency did fall as low as $140 before it found some buying pressure, which may mean that this is a near-term support level that provides some much-needed relief to ETH’s price action.
In spite of this, The Cryptomist, a popular cryptocurrency analyst on Twitter, explained in a recent tweet that ETH recently broke below the lower boundary of a descending triangle, which means it could move as low as $126 in the near-term.
“$ETH: Descending triangle is completed! This pennant typically breaks down as displayed. I think we could see $126-$130 region,” she noted while referencing the chart seen below.
Descending triangle is completed!
This pennant typically breaks down as displayed
I think we could see $126-$130 region pic.twitter.com/IGmrsifGmY
— The Cryptomist (@TheCryptomist) November 22, 2019
History May Spell Trouble for ETH
Although a drop to The Cryptomist’s targets may seem unrealistic, it is imperative to keep in mind that ETH is still trading up from lows of $83 that were set in early-December of 2018.
Additionally, history may support the notion that Ethereum will soon see further downside, as it has historically seen 40% price declines during negative quarters, which would mean that it may drop to $108 in the coming couple of months.
Josh Olszewicz, another popular cryptocurrency analyst on Twitter, spoke about this possibility in a recent tweet, pointing to a spreadsheet that shows ETH’s historical returns on a quarterly basis.
“Historically – Q4 has been $ETH’s worst quarter – $ETH negative quarters have averaged -40% (= $108 for current quarter),” he explained.
— Josh Olszewicz (@CarpeNoctom) November 21, 2019
The coming few hours and days will likely further elucidate where ETH will trend as 2019 comes to a close, as any further near-term downside could spark a bout of capitulation.
Featured image from Shutterstock
Cole Petersen , 2019-11-22 23:00:34