Ethereum Faces Bearish Outlook Amid Potential Trend Reversal

A prominent crypto analyst is raising concerns about Ethereum, suggesting the top altcoin could be showing signs of a bearish trend.

In a recent update Justin Bennett shared that Ethereum might be forming a diamond reversal pattern, a technical signal that often indicates a shift in trend. If this pattern is confirmed, Ethereum could potentially drop below $2,500.

It’s not a pattern I trade, but $ETH could be forming a diamond reversal pattern. 👀

The objective is $2,485 if it confirms with a close below support. Nothing is confirmed yet.#Ethereum pic.twitter.com/jQI082xnzI

— Justin Bennett (@JustinBennettFX) October 16, 2024

While Bennett clarified that he doesn’t typically trade this pattern, he pointed out that if Ethereum closes below its support level, the target could be around $2,485. At the time of his update, Ethereum was trading at $2,642, showing a slight gain over the past day.

Shifting focus to Bitcoin, Bennett noted that the open interest in BTC derivatives is at its highest point since August, with the $65,800 level being crucial for maintaining bullish momentum.

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However, he also highlighted a concerning trend: large Bitcoin holders, or whales, seem to be reducing their long positions compared to retail investors. Historically, this has led to a 10% decline in Bitcoin’s price. While it’s still early, Bennett advised keeping an eye on this development.

Alexander Zdravkov