Ether (ETH), the cryptocurrency on the Ethereum network, declined below support around $ 2,954.
$ 2,954 represents the neckline of the shoulder head shoulder formation. This level of support appears to form the basis of the three price spikes. The middle of these peaks (head) is higher than the other two peaks (shoulders).
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A break below $ 2,954 indicates a trend reversal and ETH / USD could fall in the distance between the head and neckline.
Peter Brandt, CEO of global trading company Factor LLC, shared the graph showing the formation on September 20 and warned that if the price of Ether falls below $ 2,954, it could fall as low as $ 2,000:
“I’m NOT saying believe that and I’m not shortening either, but like it or not, if you have Ether you have to deal with it. There is an OBO pattern here, successful or not.”
Ether corrected earlier this week as China’s indebted real estate sector began to affect both the crypto and traditional markets, dropping to $ 2,912 at time of translation.
Some analysts think that if the currency holds onto historical support levels, it could rebound. E.g anonymous analyst PostyXBTHe suggested that as long as Ether remains above $ 2,850, it is likely to rise.
According to the chart shared by PostyXBT, ETH / USD may retest $ 4,000 in the next few days.
Another anonymous analyst, The Crypto MonkHe said the latest correction eliminated weak investors in the market and offered a buying opportunity for strong hands.
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Brandt added that the drop in ETH / USD could be a bear trap. A bear trap is when an asset’s price performance falsely indicates that the uptrend has ended. In such a case, those who have a leveraged short position can take a big loss on the ETH / USD rally.
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