Ethereum’s native token, Ether, will extend its 30% slump this year to the lowest price level since July 2021, if a textbook technical indicator plays out.
ETH’s price fell to its six-month low of $2,159 on Jan. 24, 2022, only to rebound sharply to as high as $2,724 days later. However, this created a so-called “bear flag” chart pattern that suggests the price could drop to $2,000 or a 17% drop from current levels.
A bear flag appears when the price consolidates higher after a strong momentum downward but eventually moves further lower after breaking out of the upward range. In doing so, the price tends to drop by as much as the length of the previous decline, called a “flagpole.”
In Ether’s case, the flagpole’s height comes to be over $850. That roughly shifts its bear flag price target toward $2,000. Earlier this year, another bear flag formation had resulted in a similar decline, as shown in the chart above.