Ethereum Price Forms A Symmetrical Triangle As Whales Sell, Will It Crash?

Ethereum’s price has struggled to recover from the local low reached last week as whales continued to offload their assets. Now, a multi-month symmetrical triangle suggests there may be more pain ahead.

According to data from crypto.news, the price of Ethereum (ETH) is down 2.5% over the past seven days and down 5% from this month’s high of $3,292. The largest altcoin by market capitalization was trading at $3,115 at the time of writing and is down a whopping 37% from its all-time high reached in August last year.

Ethereum’s price has been under pressure this month due to whale sales. Santiment data shows that the number of wallets holding between 10,000 and 1 million ETH has steadily decreased since mid-December.

Large-scale selling of tokens by such investors often causes panic among retail holders, which in turn leads to further selling and loss of confidence.

The outflow from spot Ethereum ETFs hasn’t helped either. Facts from SoSoValue shows that US spot Ethereum ETFs have lost more than $345 million over the past four trading sessions. Weak demand from institutional investors has likely kept the appetite of retail investors in check as they wait for more clarity before re-entering the market.

On-chain metrics also point to weakness in Ethereum’s fundamentals, which could weigh on the price. Data from DeFiLlama shows that the total value locked for the DeFi protocols on the Ethereum blockchain has fallen from a September high of $257 billion to $175 billion.

A declining TVL typically indicates a slowdown in network usage and capital inflows, and as such could reflect reduced investor confidence in the broader Ethereum ecosystem.

Derivatives traders are also showing reduced interest. Data from MintGlass shows that open interest on Ethereum futures has fallen from a peak of $70 billion in August to $39 billion at the time of writing, highlighting a sharp decline in speculative positioning.

Since August, the price of Ethereum has fallen by more than 36%.

On the daily chart, Ethereum price has been forming a symmetrical triangle pattern since early November last year. A decline below the lower trendline of the pattern is usually a signal of bearish continuation, at least in the short term.

The cards also appear to form a large-scale inverted cup and handle pattern. The neckline of this pattern was $2,619, as shown in the chart above.

As such, a drop below $3,000 psychological support could open a path for more downside, especially towards the November 21 low at $2,619, which also lines up with the neckline of the cup and handle pattern. Traders will likely view this area as a key support level.

A decisive break below that level would likely increase selling pressure, potentially sending Ethereum down to $2,121.

On the contrary, if Ethereum price rises above the USD 3,269 resistance, which corresponds to the 61.8% Fibonacci retracement level, it could negate the bearish setup and encourage a move towards higher targets.