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An analyst has explained how Ethereum (ETH) could see his price crash up to $ 1,700 if the support level of this technical analysis (TA) pattern failed.
Ethereum can be in danger of falling under increasing channel support
In a new one after On X, analyst Ali Martinez discussed about where Ethereum can lead the following based on a pattern formation in his 12 -hour price chart. The pattern in question is an increasing parallel channel of TA, which, as the name suggests, includes two parallel trend lines that are deposited up.
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When it is active in this channel, consolidation goes to a net top. The higher tops in its price trace the upper line of the pattern, while the higher lows draw the lower level.
Just like other TA patterns, it is believed that the former line acts as a source of resistance in the near future and the latter as a point of support. Breeks from one of these borders can imply a continuation of the trend in that direction.
The rising parallel channel is not the only parallel channel in TA. When parallel consolidation takes place instead instead, the formation is known as a decreasing parallel channel. However, none of these is the most observed type, because that title is held by the basic parallel channel, which is trend lines parallel to the time axis (that is, they have zero slope).
Now here is the graph that is shared by the analyst who shows the rising channel that the 12-hour price of Ethereum has been trading in recent years:
It is clear from the graph that the Ethereum price of half-day saw a very short retest of the lower level of the rising channel recently. The coin then found support, but its value still floats quite close to the line, which means that another retest could possibly happen quickly. The level is currently at $ 2,500.
During the past years, this line has kept continuously for the cryptocurrency, so it is possible that it can do this again in the near future. ‘As Ethereum $ ETH Holds more than $ 2,500, it can boost $ 4,000 or even $ 6,000, “Martinez notes.
The former target is about halfway through the channel of the current marking, while the latter corresponds to the top level. The last time ETH was at the top was near the former line.
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“However, if $ 2,500 does not fail as support, the next goal will shift to $ 1,700!” the analyst warns. Of the current price of the currency, a crash on this target would mean a decrease of more than 39%.
It is still to be seen whether Ethereum will test the lower level of the rising channel in the coming days or not.
ETH price
At the time of writing, Ethereum floats around $ 2,800, a decrease of more than 6% in the last seven days.
Featured image of Dall-E, graphs of TradingView.com