Ethereum's native token Ether (ETH) prices may drop to a two-month cellar after the crypto retreated below support at around $2,954, as indicated by a classic trading trajectory.
Market observers say the $2,954 level represents what they call as a "head and shoulders" pattern. Ether had a value of around $2,900 on CoinDesk as the time of this writing.
If the recent analysis by J.P. Morgan strategist Nikolaos Panigirtzoglou is accurate, Ether would be trading at close to double its fair market rate.
Cryptocurrency prices fell Tuesday morning in a major market selloff triggered by worries of a potentially disastrous debt default in China, pushing many of the world's biggest crypto to their lowest levels in more than a month.
Evergrande, China's second-biggest real estate developer, alerted banks last week that it did not have the capacity to fulfill its debt payments due this month, sparking a sharp fall in the country's property sector.
Panigirtzoglou cited an analysis of Ethereum's network activity and growing concerns about competition with other platforms. More specifically, he said Ether's fair value is nearing the $1,500 mark.
Ethereum had a beating Monday when it collapsed to $2,000. Analysts predict a continuous price drop contrary to the digital token's soaring trend line of support.
Experts also cautioned about mounting blockchain threats to Ethereum, like Cardano and Solana. However, even Solana's Sol and Cardano's Ada fell around 10% at the height of the sell-off.
"We look at the number of unique addresses and hash rate to try to fully understand the actual value of ethereum," Panigirtzoglou said. "We are struggling to go past $1,500."
Research carried out by Samurai Trading Academy shows that "head and shoulders" hit their projected target nearly 85% of the time. Ether was down by almost 11% on Monday.
The value of the world's cryptocurrencies crumbled to a low of under $1.9 trillion, Monday -- around 10% less than 24 hours prior and indicating a decline of more than $250 billion, figures by crypto-data website CoinMarketCap show.
Investors were upbeat about Ethereum when it traded at $4,000 in the early days of September. Unfortunately, markets pulled back to $3,200 last week and even lower this week.
