Analyst predicts massive correction for Ethereum

Popular analyst Ali Martinez says Ethereum is looking very bearish right now after the market’s number two fell below support at $3,400. According to Martinez, ether could fall another 14 percent from here after a so-called bear pennant breakdown took place.

“The worst scenario for Ethereum right now is breaking the support at $3,400,” thus Martinez.

Huge correction for Ethereum coming?

Based on the bearish pennant, Ali Martinez foresees a drop in Ethereum’s price to the $2,800 level as a serious possibility. That would represent a significant drop from the current level of $3,286 for the market’s number two.

This pennant can be seen in the graph above. Normally, technical analysts see a downward breakout from such patterns as a continuation pattern for the downward trend.

Based on on-chain data, Martinez claims that the $2,850 level could provide support for Ethereum. This is a price point at which 1.99 million addresses collectively purchased a total of 1.64 million Ethereum.

We see that point of support in the analyst’s table above. Although the current price action does not necessarily mean that Ethereum will necessarily fall to that level.

Also dangerous price action for bitcoin?

The analyst then switches to bitcoin, for which he also sees a dangerous situation developing on the graph. According to Martinez, it is important for bitcoin that the price remains above the 200 exponential moving average on the four-hour chart.

“The 200 EMA on bitcoin’s four-hour chart remains fantastic support. Since the beginning of February, this has managed to protect bitcoin from further price falls.

For that reason, my focus is on this level, because it guarantees a price recovery if the level is maintained. However, if it breaks, as it did in January, it could be a harbinger of new falls for bitcoin,” Martinez warns.

However, at the time of writing, the bitcoin price is at $65,458, while the 200 EMA on the four-hour chart is at $65,549. Martinez is convinced that Bitcoin should rise again quickly.