- Ethereum has fallen below its multi-year falling wedge pattern, signaling potential downward pressure.
- Ethereum is testing a crucial support level near its 2016 highs against Bitcoin.
- Traders are closely watching whether Ethereum can hold this key level or face further declines.
Ether is at a crucial stage for testing the 2016 high in the Ether/BTC pair, as it indicates the high risk of the cryptocurrency market. For the past few years, Ethereum has been in a large falling wedge, a pattern that is considered bullish if it breaks out. However, at the current moment, Ethereum is below this wedge, and this means that the asset may pose a downside pressure.
Ethereum's Price Action Against Bitcoin
Ethereum had been raging inside this wedge pattern for years, which is a formation defined by a declining trend line connecting higher reaction lows and higher reaction highs. The falling wedge, generally a bullish pattern, will at many instances provide a warning sign that a reversal in price might be in the offing.
But Ethereum has gone below this pattern, and the market is still wondering if it will break down or have a strong bounce back. This price movement is of high interest to the investor because it captures the manner in which Ethereum is approaching key support levels against Bitcoin.
Important Support Levels with Market Implications
Ethereum is now probing the critical support produced by the 2016 high ground. This price level has a background: it was discussed as the key price when Ethereum was growing against Bitcoin. The fact that Ethereum is approaching this level again, after years of an upward trend, becomes interesting. There remains worry that if the price continues trading below the falling wedge Ethereum is likely to fall below this last major high timeframe support.
If Ethereum fails to maintain this level, it could actually see its relative value to Bitcoin decrease even further.The possible consequences, given that Ethereum’s position in the market now, are vast. If the price falls from this crucial support level, it will be a possibility of more weakness compared to Bitcoin in the Ethereum market. However, if Ethereum can hold support and enter back into the wedge then this could make for a reversal and possibly strength in the coming months.
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