Ethereum prices have recently closed reflecting Bitcoin's performance, and as Bitcoin prices are trending downward, ETH prices are following suit. However, Ethereum itself appears to have bearish fundamentals compared to Bitcoin, and crypto analysts believe the second-largest cryptocurrency by market capitalization will fall further from here.
Ethereum could fall further
A crypto analyst known as Shin Forex took to the TradingView website and shared an interesting analysis of the Ethereum price. This analysis focused on the ETH/BTC chart reveals some worrying trends in the ETH price.
The analyst explained that Ethereum's liquidity has been decreasing during this time. Rather than heading towards altcoins like ETH, it is flowing towards Bitcoin. This suggests growing investor apathy toward Ethereum, with liquidity flowing to Bitcoin, which has nothing to support it at the moment.
Additionally, the cryptocurrency analyst explains that the ETH/BTC pair has fallen below support at 0.05. Now, this drop below the support level is significant considering what happened every time it broke. Shin Forex points out that there have been two previous market cycles where ETH/BTC has fallen below support, one in 2016 and the other in 2019.
In both cases when this happened, prices crashed and then rose again. Crypto analysts do not expect the situation to change this time either and believe that ETH/BTC will fall below 0.04. If this happens, the price of Ethereum will skyrocket, and analysts have set a price target for it around $2,500.
Can ETH price survive the crash?
According to crypto analysts, the price of Ethereum does not look very good in the short term, especially as altcoins are currently trending lower within the current channel. However, if you zoom out to a larger time frame, he can get a glimpse of how the ETH price will fare after the crash.
Looking at the last two Shin Forex charts where this kind of formation occurred, there was also a precedent for funds to flow back to Ethereum. Although the price crashed in November 2016, there was a significant recovery a few months later, and ETH/BTC rose to an all-time high.
Source: TradingView.com
A similar thing happened again in 2019, this time with a crash that preceded the market rally, although it was a little more gradual. Therefore, if this trend holds, a crash in ETH is inevitable. However, a recovery is expected, and it is likely to be the start of another big bull market.
For now, the bears continue to dominate the Ethereum market and have managed to push the price below $3,000. It is traded at. According to Coinmarketcap, it was $2,975 at the time of writing, down just 0.36% the previous day.
ETH price falls below $3,000 | Source: ETHUSD on Tradingview.com
Featured image from Quora, chart from Tradingview.com
