Ethereum (ETH) Can Shift to a Bearish Trend, But New ATH Is Possible Too

Ethereum (ETH) Can Shift to a Bearish Trend, But New ATH Is Possible Too

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Ethereum failed to stay above $3000 and now it will continue to drop, according to market veteran Peter Brandt.

Brandt is a highly experienced trader and a brilliant technical analyst. By analyzing the ETH chart, he concluded that the leading altcoin is forming a bearish pattern. The expert points:

– This possible H and S [head and shoulders] exists. Whether it is completed, fails, or morphs, it exists. I am NOT a hater.

“Head and Shoulders” is a classic trend reversal pattern according to technical analysis. As for Brandt’s calculations, ETH could fall by more than 25%. The expected support level is around $2250.

The technical analysis predicts the movement of an asset based on the study of the chart. It is widely used in free markets and can serve as a reflection of the players’ behavior (“the psychology of the crowd”) when there is a lack of data. Technical analysis is often used for cryptocurrencies and Forex.

Peter Brandt is opposed by another proponent of technical analysis known as Smart Contracter. He uses the Elliott Wave Theory, which reflects exactly the psychology of the crowd. The theory states that a five-wave trend is always followed by a three-wave trend with the opposite sign.

Using this approach, Smart Contracter tweets that the five-wave bullish trend has already been replaced by a three-wave corrective move, and now the ETH bullish trend will continue. The expert believes that the target level is $5200, this will be a new all-time high (ATH) of Ethereum.

However, there are fundamental factors that cast doubt on the optimistic outlook for ETH. Many projects have emerged that compete with Ethereum as a platform for dApps. Although in general, they increase the capitalization of ETH, they attract investors who invest not in ETH, but these new altcoins.

The brightest of Ethereum’s competitors right now are Avalanche (AVAX) and Celo (CELO). Avalanche has launched the second version of the bridge to the Ethereum blockchain, with the help of which ETH is easily transferred to the fast Avalanche blockchain. Celo is taking DeFi projects to mobile devices, smartphones, and tablets. The popular DeFi projects Aave (AAVE), Curve (CRV), and Sushi (SUSHI) have already become Celo’s partners. The CELO token is rising all the time. Back in June, it ranked in the second hundred of the Coinmarketcap rating in terms of capitalization, and today it is already in the sixth ten. Over the past week, the price of CELO has increased by almost 30%.

However, large institutional investors prefer not to leave Ethereum completely, since Ethereum has the largest community of developers and an upgrade to ETH 2.0 is ahead. Therefore, the downtrend of ETH will not last long and highly likely will be replaced by an upward trend.