Originally published on: June 30, 2022
Ethereum has been on a rollercoaster ride as the second quarter of 2022 comes to a close. The price of Ether (ETH) took a hit on the final trading day of Q2, falling in line with other risky assets amidst concerns about inflation and rising interest rates. This downward trend could continue into Q3, putting the $1,000 price support for Ethereum at risk.
On June 30, ETH dropped nearly 5% to $1,044 after four consecutive days of losses. The ETH/USD pair broke below its rising trendline support, forming an “ascending triangle” pattern with a horizontal trendline resistance. Ascending triangles are typically bearish continuation patterns following a sharp downtrend, signaling a potential further decline in price.
Traders have been anticipating this downturn as ETH has been trading inside the ascending triangle since June 13. The recent break below the trendline support on June 29 was accompanied by a spike in trading volumes, confirming the market’s conviction for a continued downtrend. As a result, the downside target for ETH in Q3 could be near $835, representing a 20% decrease from the beginning of June.
Adding to the bearish outlook is the increase in the number of ETH on exchanges. Approximately 1 million Ether tokens have been deposited on crypto trading platforms since May 2022, indicating a growing selling pressure in the market. Institutional investors have also been reducing their exposure to Ether, with significant outflows from Ether-focused investment products in June.
Despite the negative sentiment, some of Ethereum’s biggest investors have been taking advantage of the price dip to accumulate more ETH. Both large and smaller investors have been increasing their holdings in the face of the market downturn, suggesting a bullish sentiment among long-term holders.
While the price of Ether remains down nearly 75% year-to-date, there are opportunities for savvy investors to capitalize on the market volatility. As with any investment, it’s essential to conduct thorough research and stay informed to make informed decisions in the ever-changing cryptocurrency landscape.
