Red alert as Ethereum price forms several dangerous patterns

Ethereum, the second-biggest cryptocurrency, has lagged behind Bitcoin this year amid slow growth of its exchange-traded funds and competition from other layer-1 and layer-2 blockchains.

Technicals point to more Ether weakness in the coming months. On the weekly chart, the coin formed a double-top chart pattern around $4,000. It dropped below the neckline of this pattern at $2,824 in July, confirming the bearish breakout.

Ethereum has also formed a death cross pattern as the 200-day and 50-day Hull Moving Averages made a bearish crossover. The HMA reduces lag by using weighted moving averages to smooth out price data.

The last time Ethereum formed a death cross on the weekly chart was in March 2022, and the coin dropped by over 70% after that.

Ether has also formed a bearish pennant chart pattern, which is characterized by a long vertical line followed by a symmetrical triangle. Typically, an asset experiences a bearish breakout when the two lines of the triangle converge.

Additionally, this consolidation is happening at the 50% Fibonacci Retracement level. Therefore, there are increasing chances that the coin will have a strong bearish breakout in the near term, with the next target to watch being $2,111, its lowest point on Aug. 5.

Ethereum’s weak fundamentals

In addition to weak technicals, Ethereum is also battling significant fundamental challenges. First, Ether ETFs have not seen strong inflows a few months after launch.

If the trend continues, Solana may surpass Ethereum this month. Solana has handled $23.9 billion so far, compared to Ethereum’s $24 billion.

Additionally, some high-profile Ethereum whales, including Vitalik Buterin and the Ethereum Foundation, have sold thousands of coins recently.

Therefore, a combination of weak fundamentals and technicals could push Ether lower in the coming weeks.