• Ethereum looks bearish on its charts. The 35% downswing between the Sept. 1-5 created a flag pattern predicting falling prices.

    This technical pattern claims that the asset’s trend will continue in the same direction as the initial movement which is in this case, down. Based on the size of the pattern and the height of the flagpole, it shows a target as much as 35% to the downside, which could see the smart contract leader plunge to $230.

    The downward trend in network growth adds credence to the bearish outlook. Brian Quinlivan, marketing and social media director at Santiment, says that network growth is “one of the most accurate price foreshadowers.” Therefore, investors should be wary of Ethereum’s weak adoption metrics as of late.

    “Generally, a rising network growth leads to a rising price of any project over time, in most cases. On the flip side, declining network growth for a long enough stretch can usually indicate a future slumping price with the lack of newly created addresses constantly in-flowing the coin or token,”  He said.

    In the event of a correction, IOMAP cohorts again indicate a formidable supply wall underneath Ethereum between $367 and $377. Here, roughly 480,000 addresses purchase over 9 million ETH.

    This is an intense area of interest for investors. It should keep falling prices at bay—but when it breaks, it could be catastrophic for prices, in line with the pessimistic prediction from the flag pattern mentioned earlier.

    But there’s good news for ETH as well. The IOMAP cohorts show that Ethereum sees no price resistance ahead. Nearly 1 million addresses hold 2.6 million ETH priced between $380 and $390. Given the large number of addresses holding relatively little Ether, it shows that bulls won’t struggle to push prices further up. A spike in buying pressure would allow Ethereum to resume its significant uptrend.

    As uncertainty is growing, it is imperative to wait for a clear break of the various support and resistance points before entering a position. Breaking through resistance could show the bull market while cracking support will represent an excellent opportunity for sidelined traders to get back into the market. Only time will tell which scenario will occur first.


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