Peter Brandt Identifies Ethereum Head and Shoulders Top, Price at Risk of Further Downside

Market veteran Peter Brandt pointed to a head and shoulders pattern on Ethereum’s chart, suggesting a higher probability of a further drop from this level.
Brandt’s disclosure coincided with a correction recorded by Ethereum (ETH), which occurred amid a general market-wide crash. Notably, this latest correction comes on the heels of Ethereum’s previous price surge, which allowed it to retest the key $3,900 price threshold on June 5.
After the retest, the bears took control of the situation. This bear pressure was triggered by a similar price correction witnessed by Bitcoin (BTC), the leading crypto asset. When Bitcoin fell below the $68,000 area, the rest of the market also collapsed, causing Ethereum to fall to the lower $3,500 area.
Despite the recent price drop, chart data confirms that Ethereum remains in an uptrend. However, the formation of a head and shoulders structure as identified by Brandt could lead to a downside reversal. A head and shoulders structure forms when an asset witnesses three price tops. Among them, the middle top is higher than the first and last tops.
A feature of this pattern is that each of the three price tops was preceded by a significant decline. It is worth noting that the middle top price represents the head, while the first and second tops represent the shoulders. Analysts confirmed the formation of this structure when the price broke below the neckline.
In Brandt’s chart, Ethereum broke below the neckline when it fell to $3,501. Despite recovering to $3,540, ETH remains below the neckline. While Brandt identified the head and shoulders pattern, he stressed that the structure remains controversial, indicating uncertainty. This suggests that the model may be denied.
However, if this structure holds, Ethereum could record further price declines due to a reversal of the bearish trend. Crypto analytics account Knepala further confirmed that ETH is not showing strength on the daily timeframe, drawing attention from multiple momentum indicators.
For example, the relative strength index (RSI), a momentum oscillator used to assess the strength of Ethereum’s price movements, has collapsed. The RSI dropped sharply to 44 amid the price crash. This sharp decline confirms that selling pressure is extremely high and the downward thrust is strong.
Meanwhile, in derivatives markets, Ethereum volumes surged and multiple long positions fell. According to data from Coinglass, trading volume surged 156% to $28.35 billion, while the long-short ratio fell to 0.8965, indicating an increase in long positions and traders betting on further declines.
At press time, Ethereum’s price is $3,529, down 3.81tpt3t in the past 24 hours. CryptoQuant author ShayanBTC revealed that the taker-buy ratio also fell below 1, indicating that bears were actively selling. According to him, if this metric does not pick up, ETH could fall further in the short term. Disclaimer: This content is for informational purposes only and should not be considered financial advice. The opinions expressed in this article may include the personal opinions of the author and do not necessarily reflect the views of The Crypto Basic. Readers are encouraged to conduct in-depth research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.