Ethereum’s native token, Ether (ETH), is poised to challenge and possibly breach the $1,500 support threshold shortly.

Key Insights:

• Ethereum has entered a phase suggestive of a bearish continuation pattern.
• Predictions indicate that ETH could plummet below $1,500 by early March due to founder-led sales.

Breakdown of ETH Bear Pennant Targets $1,475

On Monday, ETH’s value slid over 5.60% to approximately $1,850 amidst a general sentiment of de-risking amid tariff worries. This significant drop saw the cryptocurrency breach the lower trendline of its current bear pennant formation, supported by increasing trading volumes that reflect traders’ conviction.

Market Analysis

A typical bear pennant breakdown is said to resolve when the price declines by the height of the preceding downtrend. If this principle is applied to ETH’s current trend, it suggests a potential target price nearing $1,475, closely aligned with the key psychological resistance around $1,500, likely by late February or early March.

The condition for the bulls is to regain the pennant’s lower trendline as support, followed by a rally above the 20-day exponential moving average (the green line) positioned at $2,085 to potentially negate the bearish forecast.

Upcoming Sales from Vitalik Buterin

Ethereum co-founder Vitalik Buterin’s scheduled ETH sales appear to hinder the bulls’ momentum in February. On January 30, Buterin announced that he aimed to withdraw and dispose of 16,384 ETH through his Kanro entity, intended to finance ecosystem development, open-source projects, and other long-term ventures during a phase of ‘mild austerity’ for the Ethereum Foundation.

Since early February, Arkham Intelligence has detected about 9,000 ETH sold incrementally, with heightened activity observed recently after a withdrawal of 3,500 ETH from Aave.

“Vitalik Buterin is again selling ETH at a quicker pace,” reported Lookonchain on Monday. Ethereum’s value has plummeted 18.55% thus far in February, coinciding with Buterin’s ETH sales. This downtrend may further exacerbate if he proceeds to liquidate the remaining approximately 7,350 ETH.

Historical patterns indicate that founder-related supply imbalances, including transfers from the Ethereum Foundation’s treasury, can heighten negative sentiment among investors. For example, the 35000 ETH transfers in May 2021 (valued around $125 million at that time) prefaced a 50% price drop for ETH within a few weeks.

Such conditions may elevate the likelihood of ETH reaching its pennant target below $1,500 soon.