Ethereum price has been under intense pressure lately. After soaring to an all-time high of $2,050 during the weekend, ETH price dropped by 33.5% to $1,352. Today, it is crawling back and is trading at $1,637, which is 25% below the all-time high.
Ether price correction was inevitable
The sharp decline of Ethereum and other cryptocurrencies caught many traders off guard. Analysts attribute this decline to profit-taking and a tweet by Elon Musk who said that BTC and ETH were getting expensive.
Another statement by Janet Yellen also contributed. In a New York Times (NYT) conference, she said that cryptocurrencies were inefficient. Further, the decline happened as investors took profits since the currency was already up by more than 180% this year.
Still, a closer look at the Ethereum price chart shows that the decline was bound to happen after all.
ETH price technical prediction
The four-hour chart below shows that the ETH price was in a strong upward trend before this week’s crash. However, a closer look shows that it was forming a rising wedge pattern that is shown in green. In technical analysis, this pattern is usually a bearish sign because it shows that bulls’ momentum is fading. A bearish reversal happens when the wedge approaches its tipping point.
Looking ahead, there are two potential scenarios. First, bulls could return as they attempt to buy the dip and retest the all-time high of $2,050. As I have written before, I still believe that the Ethereum price will climb to $2,500 in the medium-term. Second, the price could resume the downward trend. The danger point for this scenario is if the price retests this week’s low of $1,352.
Ethereum price chart