Ethereum prices might slump further in short term with a bearish potential double-top formation

Ethereum has been on a recovery mode since 24th September which saw the second-largest altcoin lose almost 17% of its value in a single day. ETH was trading at $172.24 at press time having seen a decline of 1.54% on the 24-hour chart.

1-Hour Price Chart

Source: TradingView

In the 1-hour price chart, Ethereum was slated to form a potential double top if it managed to close below the neckline at $167.74. ETH price rose from $160 and formed the first top at $178.02, the price fell to its neckline and rose back to form the second top at $178.4. The price has been on a decline since then and if the altcoin manages to close below the neckline, it would be followed by a bearish price breakout.

RSI indicator suggested that the altcoin was overbought on 27th September, but selling pressure has been dominant even before the massive fall on 24th September; RSI indicated sellers had an upper hand.

MACD line had a bearish cross over and has been moving under the signal line since then, suggesting that the bearish sentiment was dominant.

4-Hour Price Chat

Source: TradingView

On the 4-hour price chart, ETH formed a descending triangle characterized by higher lows at $150.61, $163.2 and $169.08; and a constant resistance at $172.06. A descending triangle is generally followed by a bearish price breakout, thus the prices might slump further.

RSI indicator showed that the coin was oversold on 24th September and since then sellers had an upper hand, despite a few attempts to reach the median line. The momentum looked bearish with selling pressure on the dominant side.

MACD indicator showed a bullish cross-over on 26th September and since then MACD line has been moving above the signal line but with a bearish breakout on the cards, the MACD line might go through a bearish cross-over in short term.

Conclusion

Both the 1-hour and 4-hour price chart for Ethereum indicated a dominant bearish pattern formation, a potential double-top in the 1-hour chart and a descending triangle on the 4-hour chart. In both the charts, the price breakout was due to downwards and key indicators like RSI and MACD indicated bearish momentum as well.