Key Takeaways:
- ETH could lose an additional 5% of value in the upcoming session.
- The Head and Shoulders pattern backs the bearish outlook.
- As the Merge approaches, Ethereum holders expect an upside move.
YEREVAN (CoinChapter.com) – Ethereum’s native token Ether (ETH) traded at just above $1,400 on July 26, following an 8% drop in the previous 24 hours. Despite finding temporary support in the Asian-Pacific session, the four-hour chart points to a bearish continuation based on a technical setup.
ETH risks falling towards $1.3K
The Ethereum token has been trading in a Head and Shoulders (H&S) pattern since July 19, best visible on a low time frame chart. The setup entails three consecutive ascends, with the middle one (the Head) higher than the other two (the Shoulders). Moreover, the starting points of the three upside moves typically connect into a straight line (the Neck).
As mentioned, the H&S is a bearish reversal pattern that forecasts a drop when the price action returns to the neckline after the second Shoulder is complete. Additionally, the anticipated drop would equal the distance between the Head and the Neckline, pinpointing ETH’s target price at approximately $1,300.
Also read: ETH/BTC: Ethereum Rally Vs Bitcoin Isn’t Over Yet, Dips Turn Attractive.
If Ether confirms the H&S setup, it could lose an additional 5% of its value, further erasing July gains. Moreover, the lowering trading volumes in the previous hours support the bearish claim and show traders’ passivity.
Merge to Ethereum 2.0 approaches
The decline in the recent hours was partially brought on by low expectations from the Federal Open Market Committee (FOMC) meeting on Tuesday. As the inflation continued to grow in the previous month, the crypto community expected the Fed to double down on its hawkish policies. In that case, Bitcoin and, by extension, the altcoin market could fall as casualties.
Meanwhile, the number of crypto enthusiasts betting on the elusive ETH 2.0 kept growing. As the long-awaited Merge on Sep. 19 approached, the total value in the ETH 2.0 Deposit Contract reached an all-time high of 13,153,829 ETH, according to an on-chain analysis by Glassnode.
Also read: Account opens $1.7B worth of Ethereum (ETH) contracts in an hour.
At a recent Ethereum conference in Paris, the founder Vitalik Buterin discussed the blockchains’ roadmap and the Merge. Many believe that the complete transition to proof-of-stake consensus will “revolutionize” the ecosystem.
After the Merge, you will be able to build an Ethereum client that does not even know the proof-of-work phase even happened.
stated the CEO.
Also read: Ethereum (ETH) Forms Bullish Continuation Setup, Can The Bulls Take Over?
Despite the unfavorable macroeconomic climate, the Merge remains an essential compass in making Ethereum price predictions.
Moreover, the transition promises to boost the network’s productivity, lower energy consumption, and notoriously high gas fees. Thus, ETH and ETH 2.0 holders hope for a powerful serge after the Merge.
