- Ethereum price shows a bear flag formation that forecasts a 15% downswing to $1,100.
- ETH needs to break below $1,280 to kick-start a sell-off to $1,100.
- A daily candlestick close above $1,338 will create a higher high and invalidate the bearish thesis.
Ethereum price has been consolidating since September 21, resulting in a bearish development. A failure to recover quickly or more bearish pressure on Bitcoin could worsen the situation and kick-start a nosedive.
Ethereum price could explore south
Ethereum price triggered a bear flag breakout on October 11 by producing a daily candlestick close below $1,297. This technical formation contains a massive sell-off named flagpole and is followed by a tight, but upward-facing consolidation termed flag.
The 15% crash between September 17 and 21 constituted the flagpole, while the consolidation that caused ETH to produce three higher highs and two higher lows created a flag.
This setup forecasts a 15% crash to $1,100, obtained by adding the flagpole height to the breakout point at $1,297. A breakdown of the $1,280 support level will trigger this nosedive and knock the Ethereum price to $1,080, which is the midpoint of the $1,282 to $878 range.
However, considering the bearish setup for Bitcoin price, things could escalate quickly, causing ETH to pierce the $1,000 psychological level and dip into the triple-digit territory.
ETH/USDT 4-hour chart
While things are looking gloomy for Ethereum price, quick recovery in Bitcoin price could ease things for ETH holders. If bulls step in and push Ethereum price to produce a daily candlestick close above $1,338, it will create a higher high and invalidate the bearish thesis.
Such a development could see ETH extend its run-up to tag the $1,440 resistance level.