Ethereum Price Analysis: ETH/USD at Risk of Fully Reversing February Gains Despite Successful Hard Fork Upgrades
- The Ethereum (ETH) price has been edging lower since the massive drop on 24th February.
- ETH/USD price action has formed a bearish flag/pennant pattern structure, which is subject to downside risks.
ETH/USD: Recent Price Behavior
The Ethereum price over the last seven sessions has been edging lower within a narrowing daily range formation. Since being hammered hard to the downside by the market bears on 24th February, ETH/USD remained weighted to the downside. The caution from buyers isn’t too surprising given the steep fall of some 20%. It has been very much reliant on a critical near-term demand zone, which tracks from $135 down to $128.
ETH/USD during this period has formed somewhat of a bearish flag pattern structure. The price is respecting both trend lines, firming the case of this potential bearish set-up. The significant drop on 24th February observed as the pole of the pattern, with the current consolidation form producing the actual flag. Given this setup, the price does appear to be subject to further downside pressure. The successful hard forks on the Ethereum network failing to prop up the falling price.
Successful Hard Fork Upgrades
Earlier in the week, the Ethereum Foundation successfully completed its long-awaited hard fork. As anticipated, this was achieved on block 7,280,000. The move from Ethereum marked its sixth and seventh upgrades to its network – Constantinople and St. Petersburg, respectively. It was all somewhat of a relief after prior problematic delays.
The Constantinople update was initially scheduled for 17th January but postponed due to a bug was found by ChainSecurity. This bug would have allowed attacks to re-enter the same function multiple times freely. In theory, they could have gone on to withdraw funds forever on end.
Technical Review – ETH/USD
As detailed earlier, ETH/USD is moving within the confinements of a bearish flag formation, vulnerable to downside risks. Immediate support is eyed at the lower acting trend line of the pattern – namely, $134. Should this fail to hold, then in proximity sees a key area of demand running from $135 down to $128. A breach of both noted near-term supporting areas would likely result in a heavy bout of selling pressure for ETH/USD.
The gains produced in February are at risk of 100% reversal, and ETH/USD has already given back 20% of those. It is worth noting that the price advanced some 65% from the 6th up to 24th February. The price at the time appeared to be pumping heading into the planned hard forks, something previously observed. Given the chunky gains that were made within the month, it wouldn’t be surprising if this is merely some profit-taking influencing the current move south.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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