Ethereum’s Ascending Triangle Breakdown: Price Target at $700
The price of Ethereum (ETH) is currently around $1,550, unable to surpass the $2,000 mark so far in 2023. Despite forming an ascending triangle pattern, which is typically bullish, there are signs that this pattern may be failing. If the pattern breaks down, the price of ETH could drop below $1,000.
Underperformance and Bearish Signals
While Bitcoin and other cryptocurrencies experienced a bear market in 2022, Ethereum reached its low point in June of that year. However, in 2023, ETH has underperformed compared to BTC. Now, it faces the risk of a new low with a target price well below $1,000 if the presumed bullish pattern fails.
The Ascending Triangle Pattern
ETHUSD has been trading within an ascending triangle pattern since its low point in 2022. This pattern consists of higher highs forming an upward trend line and a horizontal resistance zone around $2,000. Throughout this pattern, trading volume has been decreasing. Currently, the price is about two-thirds of the way to the apex of the triangle.
Bearish Elliott Wave Analysis
Although an ascending triangle is considered bullish, there is only a 63% chance of a breakout according to Thomas Bulkowski’s Encyclopedia of Chart Patterns. The remaining 37% of the time results in breakdowns. In Elliott Wave analysis, an ascending or descending triangle can also be seen as a barrier triangle. These triangles are corrective and usually appear before the final move in a sequence.
The Target Price: Sub-$1,000
In a bear market, corrective structures are labeled ABC. Triangles often appear during the B wave, which precedes the final move. By projecting the 1.618 Fibonacci ratio from the A wave, the target price for the broken pattern is estimated to be around $300 per ETH. Considering both the measure rule and the Fibonacci extension target, Ethereum may face prices below $1,000 in the future.
Hot Take: Ethereum’s Bearish Trend Continues
Ethereum’s failure to break above $2,000 and the breakdown of its ascending triangle pattern suggest a bearish trend for the cryptocurrency. Despite positive news such as the launch of Ethereum Futures ETFs, ETH has struggled to gain significant upside momentum. With a potential target price of $700 based on the busted pattern and even lower levels predicted by Fibonacci analysis, it seems that Ethereum could face further downward pressure in the coming months.
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