Ethereum (ETH) Faces a Potential Price Correction After Double-Top Pattern Appears on Higher Timeframes

This formation negates the previously observed cup and handle pattern, which had initially suggested a bullish outlook for the cryptocurrency.

Cryptocurrency traders and analysts are keeping a close eye on Ethereum (ETH) after a potential double-top pattern emerged on higher timeframes, which could lead to a price correction if key support levels are breached.

This formation negates the previously observed cup and handle pattern, which had initially suggested a bullish outlook for the second-largest cryptocurrency.

Currently, Ethereum is trading sideways within a large consolidation range. A double-top pattern is characterized by two price peaks at similar levels, followed by a dip and another rally that fails to surpass the previous highs.

This pattern is typically viewed as a bearish formation, indicating a potential trend reversal. If the second peak is lower than the first, it suggests weaker buying pressure, increasing the likelihood of a price decline.

Both traders and analysts are laser-focused on the support level for confirmation of the double-top. A decisive breakdown below this threshold would trigger selling pressure and drive the token toward the downside target of around $1,200.

However, if ETH manages to hold above the support and break through the resistance level at the peaks of the double-top, the bearish scenario would be invalidated, potentially leading to a retest of higher price levels.

Adding to the technical mixed signals, the volume profile during this consolidation period indicates a lack of strong directional bias, with market participants awaiting a clear breakout from this consolidation phase to determine the next directional move.

Despite the bearish pattern, recent market data reveals a significant inflow of $300 million into Ethereum within a single day, according to market scanner Material Indicators.

This institutional buying activity is also evident, with the current US president acquiring ETH and investment giant Blackrock making substantial purchases, as highlighted by analyst Michael van de Poppe.

These institutional moves signal growing confidence in Ethereum's long-term potential.