Ethereum is facing risks of undergoing a massive plunge as it partially confirms a bearish flag pattern.
The technical setup appears after an asset forms a consolidation channel upward following a strong bearish move. The downward movement is called flagpole, while the consolidation is referred to as the “flag” itself. Ethereum is forming the same pattern, as shown in the chart below.
ETH/USD is consolidating in an upward channel. Source: TradingView.com
The second-largest cryptocurrency is forming a flag pattern followed by a large slope downwards – a flagpole whose maximum height is near $178. Thereby, if ETH/USD breaks below the upward channel support, then it is at the risk of declining by as much as $178 from the point of breakdown.
That is, at least, according to the technical description of a Bearish Flag pattern. If ETH/USD breaks to the downside today, then its primary downside target sits at $177. Nevertheless, breaking down from a higher level will naturally lift the Flag target as well.
A Bearish Flag, meanwhile, is never 100 percent accurate. For instance, if the upward channel retracement extends