Ethereum prices (ETHUSD) just experienced a substantial decline of about 18 percent. The decline started around 19:45 London time, which also was when we saw declines in most major cryptocurrencies. It looks like the fall originated in Bitcoin (BTCUSD) as the price declined below the important July 17 low of $9052 and appears to have triggered a huge cluster of stop-loss orders sending prices lower. At the time of writing, all major cryptocurrencies were down by double digits.
Ethereum prices (ETHUSD) slid below their August low of $164, and reached a low of $154, to bounce back as it looks like bargain hunters decided to buy on the price dip. Nonetheless, the trend in Ethereum prices remains sharply downwards, and it will probably take a few days until prices stabilize. In case the slide in prices continues then ETHUSD might reach the April 25 low of $148.88, followed by the March 25 low of $132.69. The trend will remain downwards as long as the price trades below September 19 high of $224.79.
I judge that there is no clear pattern in Ethereum prices that suggest a significant slide in the price, but the trend remains bearish and needs to be respected. However, if we use the descending triangle pattern in Bitcoin prices to derive a target for ETHUSD, then it suggests that the price could decline by another 20 percent to about 119 dollars per coin.
ETHUSD Daily Chart
How I derived the target in ETH using Bitcoin prices
Bitcoin prices were consolidating in a descending triangle pattern, with the horizontal support level at $9052, and a downward sloping trend line from the 2019 high of $13882 via the August 10, and September 6 highs. The difference between the horizontal support level and the downward trend line around the middle of the pattern suggest a 25% drop from the $9052 level. Bitcoin prices have so far declined by 6.5% from the horizontal level, and there is scope for another 20% decline.
Since Bitcoin and Ethereum prices reached a high in 2019, ETH prices have been declining faster than bitcoin prices by a factor of about 1.4. If Bitcoin prices were to decline by another 20 percent then ETHUSD might decrease by 28 percent resulting in ETHUSD reaching about 119 dollars per coin. However, there is considerable uncertainty around this estimate as ETH might decline faster or slower than Bitcoin going forward.
A big victory for bullish ETH and BTC traders is if ETH closes the day above the August low of $164, and Bitcoin closes the day above $9052.64, as is might suggest that we are dealing with a false breakdown. However, it I don’t think price will bounce strongly as outlined above.