Ether, Ethereum’s native currency (ETH), fell in the final trading day Q2/2022. It traded in sync alongside riskier assets amid persistent concerns about higher inflation and rising rates. It could lead to further declines in Q3.
Price breakdown for ETH
After a four-day losing streak, ETH’s price fell nearly 5% to $1,044 this June 30, following a plunge of almost 5%. The ETH/USD pair also broke below its interim rising support. This, in conjunction with a horizontal trendline resistance, to the upside, creates an “ascending triangular” pattern.
When they are formed after a sharp downtrend, ascending triangles can be considered bearish continuation patterns. A breakdown of an ascending triangle usually results in the price falling further, often by as much as its maximum height.
Since June 13, Ether was trending within an ascending triangle. However, Ether broke below the lower trendline of the triangle on June 29, confirming traders’ belief in a further downtrend.
Daily price chart for ETH/USD featuring an “ascending triangular” layout. Source: TradingView
ETH’s downside target for Q3, which is led by the ascending triangular setup, now stands at $835. This is almost 20% less than today’s price.
Exchange reserves are increasing
An uptrend in the trading volume of ETH is also a positive sign for bearish technical outlook.
According to CryptoQuant data, around 1,000,000 Ether tokens have been deposited by investors across all crypto trading platforms. It is a sign of growing selling pressure in Ether market, as the amount of ETH in exchange wallets increases.
Reserves of Ethereum. Source: CryptoQuant
CoinShares reported that institutional investors are also limiting their exposure to Ether by withdrawing capital form dedicated investment funds.
In June, Ether-focused investment products saw $136.9 Million worth of outflows. They have processed approximately $450 million in withdrawals so far in 2022, confirming the bearishness of traditional investors on ETH.
Source: CoinShares. Net flow from/to crypto funds by assets. Source: CoinShares
The dip is bought by ETH sharks, whales, and other marine mammals
The bright side is that some Ether’s wealthiest investors have had the opportunity to “buy a dip” due to the drop in Ether’s price across June.
Related: “Can’t Stop, Won’t Stop” — Bitcoin hodlers purchase the dip for $20K BTC
“Ethereum shark addresses (with between 100 and 100K $ETH) collectively added 1.1% of the coin supply on this -39% dip [since July 7],” stated Santiment, a crypto focused data analytics platform.
Historical evidence suggests that this tier group has alpha on future price movements.
Ethereum ‘whale” holdings. Source: Santiment
ETH number of addresses that hold 100+ coins. Source: Glassnode.
Coinglass data shows that smaller investors are also showing a similar dip buying sentiment. Since the end of last, there has been a steady increase in addresses with at least 0.1, 1 and 10 ETH, respectively.
Ether’s current price is down by nearly 75% over the past year.
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