Ethereum market analysts are desperately looking for a bottom, but ETH price technicals do not rule out further declines below $700.
Ethereum’s native token, Ether
, according to the Lower Fractal observed by independent market analyst Wolff, expects a strong bullish reversal after losing 25% from the November high of $1,675.
Will Ethereum Price Match Its March 2020 Fractal?
Wolf compares Ethereum’s multi-month downtrend between May 2018 and March 2020 to a similar but relatively short correction after July 2022. If this move repeats, it means that the price of Ether has bottomed out in November 2022, as shown below. .
ETH/USD Price Performance Comparison 2019-2020 and 2022. Source: TradingView/Wolf
Wolf signals from the March 2020 drop in Ethereum prices caused by the Covid-19 pandemic – a black swan event. Similarly, the price of ETH was reduced in November 2022 due to another black swan – the collapse of the FTX cryptocurrency exchange.
ETH/USD bounced back aggressively after the March 2020 crash, as Federal Reserve rate cuts pumped more money into the economy, some of which spilled over into the crypto market.
Likewise, the “black swan” of Ether’s modest post-FTX recovery in November 2022 coincides with growing expectations that the Fed will slow rate hikes. Therefore, ether has a good chance of repeating the March 2020 fractal to new monthly highs.
Also, independent market analyst Cold Blood Shiller sees a “clear breakout point” on Ethereum’s daily chart, namely its attractive oscillator (AO) and relative strength index (RSI). Both indicators seem to be turning bullish recently as shown below.
ETH/USD Daily Price Chart. Source: TradingView/Cold Blood Shiller
Crypto AI platform delivers an average of 17 successful alerts every month in 2022
Bears expect ETH to lose another 50%
However, Ether is down 75% from its November 2021 record and the market has seen multiple bull traps since then.
Market analyst Aditya Siddhartha Roy points out that a similar bull trap is likely to form in the current mini-uptrend, which he argues could lead to weakness near the multi-month descending resistance line.
ETH/USD Daily Price Chart. Source: TradingView/Aditya Siddhartha Roy
A decisive pullback from the downtrend line could push Ether to $700, which could be a “potential bottom,” Roy explains.
RELATED: Ethereum Derivatives Look Bad, But Traders Believe ETH Is Underlying
Roy’s analysis aligns with Ethereum’s symmetrical triangle setup, best seen on the long-term chart below, with technical weakness around $675.
Three-day ETH/USD price chart. Source: TradingView
In other words, the ETH/USD pair is at risk of another 50% drop in early 2023.
This article does not contain investment advice or recommendations. Every investment or trading move involves risk, and readers should do their own research when making a decision.