Ethereum Price Analysis

Ethereum price analysis; The pattern of the twin roof on the diagram is taking shape


Ethereum prices also fell sharply yesterday following the collapse of financial markets around the world. There is now a downtrend in the Ethereum market outlook that, if done correctly, could push the price below $ 1,984.

to the Report Coin Telegraph Yesterday, as concerns over China’s possible housing bubble escalated, selling pressure in the digital currency market rose and Ethereum prices fell.

Ethereum fell 12.5 percent to $ 2,911 yesterday. This is the lowest price level of Ethereum since August. Bitcoin, Binance Coin, Cardano, Solana and other major currencies also fell in double digits.

Ethereum price analysis;  The pattern of the twin roof on the diagram is taking shape
Yesterday’s performance of the top 10 currencies in the market

The fall in the price of digital currencies reflected the state of other financial markets around the world. Following the bloody day in the Asia-Pacific and Europe markets, the US stock market also fell. On the other hand, the value of the US dollar and treasury bonds has increased with increasing purchases by investors.

The main reason for the collapse of the financial markets yesterday is the heavy debt faced by Evergrand, the giant of the Chinese real estate industry. The world’s most indebted real estate company is facing $ 300 billion in debt. Part of this debt includes the interest on international bonds, which must be paid by September 23 (October 1).

Deutsche Welle has said that if the Evergrande collapses, it could pull many banks down, just like what happened during the 2008 US housing bubble in the Lehman Brothers.

Although Ethereum does not trade concurrently with other financial markets, its 30-day performance correlation with Bitcoin, a digital currency affected by macroeconomic fundamentals, has been close to 85 percent. As a result, Ethereum appears to have been indirectly affected by a possible housing crisis in China.

Also read: What was the reason for the market crash; What is the story of the overground debt crisis?

Forming a downward pattern in the Ethereum price chart

The recent conflict between buyers and sellers has led to the formation of a pattern that in 75% of cases has been successful in achieving the downtrend.

The formation of this downward pattern, called the twin ceiling, is such that at the beginning the price rises strongly, then decreases, and after hitting the neckline, it rises again to the same level as the previous ceiling. This move is accompanied by a decrease in price and a re-collision with the lower neckline. It should be noted that all these fluctuations occur above the pattern support or the lower neckline. Eventually the price falls below the lower neckline and the distance between the two ceilings and the lower neckline decreases.

Ethereum price analysis;  The pattern of the twin roof on the diagram is taking shape
How the price moves according to the failure or non-failure of the neckline of the twin roof pattern

The Ethereum appears to be in the middle of the twin roof pattern. As can be seen from the chart below, the price fell to $ 1,984 after reaching a high of $ 4,385 on May 12 to support at the neckline and rising again to $ 4,030 on September 3 (May 12). September) has formed a new roof.

Ethereum price analysis;  The pattern of the twin roof on the diagram is taking shape
Ethereum Price Chart (1-Week View of Ethereum Market / Dollar)

If the twin-roof pattern continues to work correctly, the price may reach $ 1,984 as the selling pressure increases, in which case the neckline may break and fall further. However, it is unlikely that Ethereum will fall deep below the $ 1,984 support.

This level is close to the Ethereum 50-week moving average (EMA); The index is currently in the range of $ 2,118 and is another support for Ethereum’s uptrend. The 50-week moving average has also served as a buyer entry point during the recent market growth.

Also read: Familiarity with 10 technical analysis chart patterns that every trader should know

In the 1-day timeframe, the next price support is in the range of $ 2,536 and the moving average is 200 days. Thus, a price return from this level could invalidate the hypothesis of the formation of a twin roof pattern.

Ethereum price analysis;  The pattern of the twin roof on the diagram is taking shape
Ethereum Price Chart (1-Day View of Ethereum Market / Dollar)

Fundamental factors

The Ethereum market continues to focus on the network’s role in the growing Decentralized Finance (DeFi) and Non-Alternative Tokens (NFT) industries. Cathie Wood, CEO of Ark Invest, recently said during the SALT event that investors should dedicate at least 40% of their portfolio to Ethereum.

The CEO of Ark Insoot said:

I’m fascinated by decentralized finance, [صنعتی] Which reduces the infrastructure costs required to provide financial services, in a way [شرکت‌های فعال در] The traditional finance industry does not understand this now.

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