A popular crypto analyst is drawing a line in the sand for Ethereum and warns of a significant price drop if the top altcoin capitulates from that level.
The pseudonymous analyst known as Altcoin Sherpa tells his 176,300 followers that the leading smart contract platform needs to hold the $1,750 to $1,757 range or risk dropping 20% or more.
“Under this level and we go another 20% down to $1,500 or lower probably.”
The analyst next looks for the silver lining in historical data as he provides charts showing how ETH’s current price action could be mirroring its market structure in that of May 2021.
“Maybe the one saving grace is that it always looks f***ing terrible before it isn’t. Price is fractal and the same patterns appear on all timeframes.
This is what happened in May 2021, similar price action on the one-day [chart]. Obviously much different macro conditions though.”
The trader’s charts suggest that Ethereum may be going through three distinct phases which convince traders that the blockchain looks extremely bearish before it bottoms out and rallies.
Altcoin Sherpa concludes his ETH analysis by saying he isn’t 100% certain it will rally and therefore his stated capitulation level is important to maintain.
“Can’t really compare last summer to now but you can draw some comparisons to fractals on lower timeframes.
Not saying that this is going to go up or anything, just an observation that things look the worst before they get better.
This remains a must-hold level in my opinion.”
At time of writing, Ethereum is down 3.09% and is trading for $1,776.
Altcoin Sherpa also shares his thoughts on leading digital asset Bitcoin (BTC) by saying that while he had expected BTC’s mid-week rise above $30,000, he would prefer to place long positions at around the $28,400 level.
“Back to the range as expected. A bit lower is likely a better place to long but this entire area is choppy and not very clear to me for levels.
Would rather wait for $28,400 first.”
Bitcoin is also down by 2.47% and currently priced at $29,748.
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