Ethereum has been closely tracking Bitcoin’s price over the past several weeks
This caused it to see some intense overnight instability, with its price rising to highs of $246 overnight after crashing to lows of $235
One bear-favoring technical pattern that has been forming over the past few days could lead it significantly lower
Analysts do believe that ETH 2.0 launch hype could be enough to invalidate this weakness
Ethereum has seen mixed price action in recent times, rallying all the way up to highs of $255 before retracing and entering a multi-week consolidation phase.
Analysts are conflicted as to whether or not thus consolidation will result in a bull-favoring movement, as there are some factors that suggest bears could be garnering increasing control over the crypto.
One analyst has been closely watching the development of a head and shoulders (H&S) pattern over the past several days, and he notes that any further weakness could confirm its validity.
It is also a strong possibility, however, that hype surrounding the upcoming launch of the Ethereum 2.0 testnet will generate some significant hype that helps propel the crypto higher in the months ahead.
Ethereum Consolidates Alongside Bitcoin and Aggregated Market
At the time of writing, Ethereum is trading up marginally at its current price of $243.
This is around the price point it has been trading at over the past week, with its buyers and sellers deadlocked in the time following last week’s immense volatility.
Although this sideways trading has done little to offer any insight into which direction it may trend next, it is important to keep in mind that Ethereum has been forming a bear-favoring H&S pattern over the past couple of weeks.
One trader who has been watching this pattern develop recently offered an updated chart, showing that ETH has still yet to post any confirmed break below the pattern’s neckline at $232.
Image Courtesy of Josh Olszewicz
Although this certainly is not the cleanest H&S pattern at this point, it could still prove to be valid if buyers are unable to push the crypto higher in the near-term.
ETH 2.0 Launch Could Invalidate Technical Weakness
Any potential technical weakness seen by Ethereum at the present moment may be negated by the hype surrounding the imminent ETH 2.0 testnet launch, which is slated to occur at some point in Q3 of this year.
The same analyst who has been watching the head and shoulders pattern develop also explained that he believes ETH could soon post some massive gains against its BTC trading pair due to news surrounding 2.0.
“ETH/BTC really coiling for a move leading into 2.0 phase 0 shenanigans…” he stated, offering an upside target of 0.035 BTC.
Image Courtesy of Josh Olszewicz
The genesis nodes running on ETH 2.0 will receive generous staking rewards of over 20% annually, but this number will decline towards 6% after 5 million ETH has been staked.
These rewards are likely to spark both hype and potential accumulation.
Featured image from Shutterstock.