- Despite dropping $4000 from highs, ETH/USD price action remains bearish&
- Head and shoulders pattern indicates more downside
- A bearish flag pattern supports short-sellers
Traders are often impatient for a market to move. Long periods of price consolidation lead to overtrading or giving up on an idea simply because the market did not move.&
This is particularly true in the crypto market. Known for its high volatility, it brought fortunes to many traders as quick moves resulted in quick profits.&
For instance, ETH/USD rose from $1000 in 2021 to $5000 in 2022. The ones that bought and held onto their traders for a year saw their accounts increasing exponentially.&
But trading is a story of both winning and losing. Not everyone wins. In fact, most retail traders lose money trading. It is easy to say that you might have bought ETH/USD at $1000 and close it at $5000. How about buying at $5000 on fears of missing out on an even bigger move, only to see the market crashing back to $1000.&
Sure enough, plenty of traders have bought into the dip. And, even though ETH/USD dropped $4000 from its highs, the bias remains bearish.&
ETH/USD bigger picture is a reason for bulls to worry
On its trip to $5000, ETH/USD formed a head and shoulders pattern. Once the price broke below the neckline, it found no support until it reached $1000.&
The level marked the bottom of the year for the stock market and the highest point for the US dollar. Since then, stocks bounced sharply, and the cryptocurrency market followed.&
But despite the rally at the start of 2023, the bigger picture remains bearish for ETH/USD. A bearish flag pattern should be a good enough reason for bulls to worry, as it is usually followed by more downside.&
Bears would want to see the price dropping to $1000 once more. It would mean that the bearish flag pattern ended and that the next target is the head and shoulders’ measured move.&
On the other hand, bulls may want the price to simply stay in the flag and test the upper edge of it. This is the only way to invalidate a bearish flag pattern.&
The post ETH/USD analysis: Bears appear in control appeared first on CoinJournal.
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