Ethereum's native token, Ether (ETH), is down nearly 40% against Bitcoin (BTC) since December 2021. But even more pain is possible for the ETH/BTC pair in the coming weeks, based on a classic technical indicator.
The ETH/BTC chart has been forming a bear flag since early June 2022 on the three-day timeframe.
In detail, bear flags are considered bearish continuation patterns that form as the price consolidates higher inside a range defined by two ascending, parallel trendlines after a sharp decline. They resolve after the price breaks below the lower trendline, i.e., in the direction of its previous downtrend.
As a rule of technical analysis, a bear flag's downside target comes to be at the length equal to the size of the previous downside move. Lately, ETH/BTC has been eyeing a similar breakdown, with its profit target sitting around 0.0439, down almost 20% from today's price.
Nonetheless, bear flags have an average success rate of around 67% when it comes to meeting its profit targets, according to Samurai Trading Academy's study. Additionally, veteran analyst Tom Bulkowski sees the bear flag meeting its target only 46 times out of 100 attempts.
A separate technical setup shared by analyst Pentoshi shows Ether facing the possibility of falling much lower than bear flag's profit target.
Pentoshi suggests that ETH/BTC could dip toward an ascending trendline that has been serving as its support since September 2019 — the level comes near 0.036, down 30% from today's price.
$ETH / $BTC looks like actual death is at the doorstep https://t.co/giJJgUDdzJpic.twitter.com/NBEzWDx2Ks
— Pentoshi (@Pentosh1) July 12, 2022
The bearish setups for ETH/BTC appears in contrast with a potential recovery across Ethereum-based investment funds.
Related: 3 key metrics suggest Bitcoin and the wider crypto market have further to fall
In detail, Ethereum funds amassed $7.6 million in the week ending July 8, according to CoinShares' latest report.
"The inflows suggest a modest turnaround in sentiment, having endured 11 consecutive weeks of outflows that brought 2022 outflows to a peak of $460 million," the report notes, adding:
"This improvement in sentiment is may be due to the increasing probability of the Merge, where Ethereum moves from proof-of-work to proof-of-stake, happening later this year."
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Explore the implications of social media behemoths X (formerly Twitter) and Meta withdrawing support for NFT profile pictures, set against the backdrop of a declining crypto market. Understand the rise and fall of NFTs on these platforms, their impact on digital ownership, and what the future may hold for this innovative yet volatile digital asset class.
BrianExplore El Salvador's groundbreaking journey into Bitcoin investment. This article delves into the nation's strategic decisions, the impact of global crypto trends, and the potential implications for future national economic strategies. A compelling read for anyone interested in the intersection of cryptocurrency and national fiscal policies.
WeiliangExplore the evolving dynamics of Bitcoin as traditional finance giants like BlackRock and Goldman Sachs enter the market. Delve into the tension between Wall Street's influence and the steadfast ethos of Bitcoin's original advocates. This article unpacks the complex interplay of power, principles, and the potential reshaping of Bitcoin's future in the face of institutional involvement.
MiyukiExplore how Chainlink's CCIP and Circle's CCTP integration is revolutionizing cross-chain transfers, allowing seamless USDC transactions across multiple blockchains. Discover the benefits for developers and users, and delve into the secure, decentralized infrastructure supporting this groundbreaking advancement in blockchain interoperability.
BrianExplore JPMorgan's insightful analysis on the introduction of spot bitcoin ETFs and their impact on the cryptocurrency investment landscape. Delve into the nuances of capital inflow, market skepticism, and strategic fund rotations influencing the future of crypto investments.
WeiliangExplore Magic Leap's groundbreaking vision for the metaverse, where digital experiences seamlessly integrate with the physical world, enhancing reality rather than replacing it. Discover how this mixed reality pioneer is navigating the hype to shape a metaverse grounded in practicality and immersive augmentation.
MiyukiThe specific allotment will be determined by the DAO through snapshot voting, subject to approval by counting votes. The proposed plan aims to distribute ARB to protocols within a 12-week timeframe, with any remaining funds slated to be returned to the DAO.
AlexThe company revealed that shareholders have until January 30 to sell their shares in the VanEck Bitcoin Strategy ETF (XBTF).
AlexThe hackathon comprises six tracks for participants to explore, covering AI, Infrastructure, Gaming, DePIN, DeSoc, and DeSci challenges.
AlexJoin the pivotal moment in blockchain innovation with L1 Blockchain Nibiru’s community sale of NIBI tokens on CoinList. Discover the details of the sale, including token supply, pricing, and unlocking schedule. Don't miss out on your chance to be part of Nibiru's journey towards redefining the crypto space.
Brian