A cryptoanalyst who goes by the name “@TheMoonCarl” on Twitter has spotted a concerning pattern on the Ethereum/USD four-hour chart.
According to a pictorial chart presented by the analyst, a bearish head and shoulders pattern is building up for Ethereum and, if validated, might cause the second largest cryptocurrency by market value to plummet to a target price of $1,570.
CHART: #Ethereum Head & Shoulders Pattern. pic.twitter.com/59aOspi7gv
— Carl From The Moon (@TheMoonCarl) May 1, 2023
A head and shoulders pattern is a bearish reversal pattern that signals that the uptrend has peaked and that a reversal is underway.
On the other hand, crypto analyst Ali points to weak network fundamentals for the second largest cryptocurrency by market capitalization.
#Ethereum | Increased active users, transaction volume, and blockspace demand indicate healthy $ETH network adoption.
However, the monthly average of active #ETH addresses has been rejected by the yearly average, suggesting weak network fundamentals and reduced utilization. pic.twitter.com/c5Lsl7hhmf
— Ali (@ali_charts) May 1, 2023
He points to the fact that the monthly average of active ETH addresses had been rejected by the yearly average, indicating weak network fundamentals and reduced utilization.
As markets get ready for a crucial week of U.S. economic events, traders will also keep an eye out for macroeconomic announcements in addition to technical and fundamental factors. The announcement of nonfarm payrolls for April is scheduled for this coming Friday, and the Federal Reserve is anticipated to raise rates by 25 basis points on Wednesday.
Ethereum slipped at the start of May start after climbing for four consecutive months through April. The cryptocurrency was down 3.16% and was trading at $1,844. Ethereum’s 2023 recovery from last year’s crypto market crash stalled at highs of $2,140 on April 16 as traders awaited further catalysts. The rise that gained momentum in March was stimulated by anticipation of the Shapella upgrade, which went live on April 12.
In positive utility news, Phantom, an initial Solana wallet built for NFTs and DeFi, have announced the rollout of “Phantom multichain” with support for multiple secret recovery phrases. Users will be able to use Ethereum, Polygon and Solana freely without switching wallets.