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Ethereum (ETH) slumped in line with broader crypto markets this week, amid concerns over slowing economic growth and rising inflation. But the token appears to be trading in a bullish technical pattern, which if confirmed, could bring about a price recovery.
ETH slumped 14% in a week to around $3,019, briefly breaking below the key $3000 level. The token had initially logged strong gains in March on anticipation of a shift to a proof-of-stake (PoS) model later this year.
The move to a PoS model is also expected to attract institutional investors to the token, which could spur another rally this year. But for now, ETH has to contend with volatile market forces.
ETH retesting an Ascending Triangle
Crypto analyst @rektcapital said the token was in the process of retesting an ascending triangle top to establish a new support level, which is slightly above $3000. If the token is able to stay above the level for an extended period, it could signal a price breakout, eventually resulting in a price recovery.
An ascending triangle is a typically bullish pattern that shows a currency may be positioned for a breakout. In ETH’s case, the breakout level would be around $3030.
But the analyst also noted that because Bitcoin (BTC) had recently failed to confirm its own ascending triangle breakout, it appeared likely that ETH would as well.
Crypto markets struggle against selling pressure
Recent losses have seen crypto markets virtually erase all of their gains made during a stellar rally in late-March. ETH has tumbled as much as 20% from a high of $3,550 hit earlier this month.
A bulk of the selling pressure has come from concerns over rising U.S. inflation. A reading for March, due later in the day, is expected to come in at a 40-year high.
The Federal Reserve has also outlined sharp interest rate hikes in response to rising prices. This is expected to reduce the viability of investing in several risk-driven asset classes, including crypto.
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