Ethereum’s native signal, Ether (ETH), has lost almost 40% against Bitcoin (BTC) since December 2021. However, there could be even more pain for the ETH / BTC pair in the coming weeks, based on an indicator classic technical.
Ether Price Technical Risks
The ETH / BTC chart has been creating a bearish pattern since the beginning of June 2022 on the three day time frame.
Bearish flags are generally seen as persistent bearish patterns that form when a price converges within a range defined by two parallel rising trend lines after a sharp decline. They settle after the price breaks below the lower trend, ie towards their previous recession.
According to the rule of technical analysis, the downside target of a bearish flag is at a distance equal to the magnitude of the previous bearish move. Recently, the ETH / BTC pair saw a similar breakout, with a profit target hovering around 0.0439, down almost 20% from the July 13 price.
However, bearish flags have an average success rate of about 67% when it comes to meeting profit targets, according to research by the Samurai Trading Academy. In addition, former analyst Tom Bulkowski estimates that the bear flag only hits its target 46 times out of 100 attempts.
It’s like ‘real death’
A separate technical arrangement shared by analyst Pentoshi indicates that Ether has the potential to fall well below the bear flag’s profit target.
Pentoshi points out that the ETH / BTC pair could move towards an upward trend that has been supportive since September 2019 – the level is close to 0.036, down 30% from the July 13 price.
—Pentoshi (@ Pentosh1) July 12, 2022
The ETH / BTC pair brings back an image of the gloomy tap knocking on your door https://t.co/giJJgUDdzJ pic.twitter.com/NBEzWDx2Ks. – Pentoshi (@ Pentosh1) July 12, 2022
Ether funds see moderate inflows
The bearish arrangements for the ETH / BTC pair seem to contrast with a potential rally in Ether – based investment funds.
Also Read: Three Key Indicators Bitcoin And The Cryptocurrency Market In General Suggest That There Is Still A Way To Go
In fact, Ether funds raised $ 7.6 million in the week ending July 8, according to the latest CoinShares report.
“Inflows suggest a modest reversal, following 11 straight weeks of sustained outflows that lifted 2022 outflows to a peak of $ 460 million,” the report noted, adding:
“This enhanced sentiment may be due to the increasing likelihood of the Merger, where Ethereum transitions from proof of work to proof of commitment, which will take place later this year.”
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