Ethereum, like most major cryptocurrencies, has seen increased levels of volatility over the past week, but has failed to make any lasting upwards moves that resulted in sustained higher highs. Analysts now expect ETH to increased levels of volatility as its Constantinople hard fork approaches later this week.
Although this hard fork event is widely seen as being bullish in the long-term, analysts believe that Ethereum is currently expressing increased levels of technical weakness, which could mean further losses are in store for the cryptocurrency in the near-future.
Ethereum (ETH) Currently Looks Technically Weak to Analysts
At the time of writing, Ethereum is trading down nearly 3% at its current price of $137. This past weekend, ETH surged to highs of $165 before swiftly being rejected and falling to lows of $135, from which is has only climbed slightly.
Ethereum’s inability to post any decent recovery after dropping to $135 has led analysts to view the cryptocurrency as technically bearish.
Hsaka, a popular cryptocurrency trader on Twitter, recently discussed ETH’s price action, noting that it will likely retest its range lows around $130 in the near-future, which are becoming increasingly weak.
“$ETH Update… Good old reaction without any follow through… Mid range support also has served as an area of bounces, but didn’t witness any follow through… Looks like this is about to test the range lows again.”
Constantinople Hard Fork Likely to Lead to Greater ETH Volatility
Although Ethereum is looking technically weak to analysts presently, its upcoming Constantinople hard fork – which is set to occur on or around February 28th – is likely to lead to increased levels of volatility.
Chonis Trading, another popular cryptocurrency analyst on Twitter, spoke about the potential effects of this hard fork, noting that although ETH’s price is currently holding above its lower Bollinger Band, the imminent hard fork will likely lead to increased volatility.
“$ETH – maintaining lower BB closing candle support on a very tight 1hr chart. Still wide on higher time frames. With the #Constantinople fork ‘currently’ scheduled for this week I will be watching #ethereum reaction to this news driven event.”
A few days ago, Alex Krüger, an economist who focuses primarily on cryptocurrencies, noted that cryptocurrencies typically crash into notable fork events.
“Last time $ETH longs/shorts ratio was this high was before the November 60% crash. Constantinople comes Feb/25. Cryptos often raise in anticipation of a fork -long the narrative- reach a local top days before, and crash into the fork. Mind the current crypto pump was ETH driven.”
Despite this, it remains unclear as to whether or not Ethereum’s recent drop constitutes a “pre-hard fork” crash, or if further losses are in store for the cryptocurrency.