Ether (ETH), the native token of Ethereum, has taken a tumble after a death cross technical pattern was seen for the first time since May, signaling potential for more losses ahead for ETH/BTC.
Death Cross Preceded 27.5% Decline
A death cross is a chart pattern that appears when an asset’s short-term 50-day moving average slides below its long-term 200-day moving average. This pattern was seen in December 2007, just before the onset of the global economic crisis.
ETH/BTC’s last death cross in May preceded a 27.5% drop in price, which came about as investors moved away from alternative coins and toward Bitcoin for safety following the Terra crash.
The new death cross could lead to a similar short-term sell-off, mainly due to the US Securities and Exchange Commission’s increased scrutiny of crypto staking services. Staking is a key feature of many blockchains, including Ethereum.
Related: What is driving Bitcoin prices today?
Bitcoin-based funds have also seen more capital inflows versus Ethereum in 2023, with the former bringing in $183 million compared to the latter’s $15 million, according to CoinShares’ latest report.
Next Targets for ETH/BTC
The next levels to keep an eye on for ETH/BTC can be seen on the weekly chart.
The 0.067-0.065 BTC area is a key support zone that has held up in recent times. A rebound here could lead to ETH prices bouncing back to its descending trendline resistance (black) near 0.075 BTC.
Alternatively, a break below the 0.067-0.065 BTC range could cause ETH to enter a prolonged sell-off that could take it to the 200-week exponential moving average (200-week EMA; the blue wave) near 0.055 BTC, a dip of about 20% from current levels.
It’s worth noting that the 200-week EMA served as a bottom for the bear cycle between November 2021 and June 2022.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.
