Ethereum Price Analysis: Bear Flag Pattern May Signal Decline to $2,400

Since the beginning of October, Ethereum's price has entered a downward trajectory and has struggled to regain significant levels. Throughout November, the Ether token failed to maintain support at several key zones, leading to a steep drop in price. While there are indications of increasing bullish momentum, the recent decline to $3,000 suggests that a continuation of bearish trends is more likely, according to a noted market analyst.

Key Takeaways

Ethereum's price has been declining since early October and struggles with support levels.
Market analyst Ali Martinez indicates a possible bearish continuation, linked to a bear flag pattern.
This pattern suggests a potential price target of $2,400 for Ethereum.
On-chain data shows that Ethereum whales purchased most of their holdings near $2,400, making it a key price level.
As of now, Ethereum is valued at $3,086 with a 4% decline in the past day.

Ethereum

Understanding the Bear Flag Pattern

On December 13, market analyst Ali Martinez shared on X that Ethereum may be exhibiting characteristics of a bear flag pattern, which is a commonly recognized technical analysis indicator suggesting further price declines. The bear flag consists of two parts: a flagpole formed by a sharp downward price movement and a flag made up of a temporary upward or sideways price movement.

Ethereum
Source: @ali_charts on X

The integrity of this pattern relies on its upper and lower boundaries, which function as resistance and support zones. If the price breaks below the support zone, it indicates a bearish sentiment, confirming an earlier sell signal. If this support is breached, Martinez suggests that Ethereum could target the $2,400 level, as previous price regions may lack the liquidity necessary for a significant price reversal.

Ethereum Whales and the $2,400 Price Level

Additionally, on-chain data supports the significance of the $2,400 price level. A pseudonymous analyst known as OnChain indicated that Ethereum whales—individuals holding at least 100,000 ETH—mostly acquired their tokens around the $2,400 mark. Historically, Ethereum rarely dips to prices close to this realized level for these large investors.

Over the past five years, there have only been four instances where the ETH price neared this acquisition cost before experiencing significant recoveries. Should this historical trend repeat, there’s a possibility that Ethereum may be at the start of another bullish rally.

Currently, Ethereum is valued at $3,086, reflecting a 4% decrease over the last day.

Ethereum
The price of ETH on the daily timeframe | Source: ETHUSDT chart on TradingView