May 22 (Reuters) - Cryptocurrency Ethereum has failed to recover from sharp losses it suffered earlier this year, and is currently trading close to price levels that could pave the way to further losses.
Ether has fallen 29% this year. Recent price action has created what technical analysts refer to as a bearish pennant pattern. This pattern follows a string of losses, with prices consolidating - not moving much up or down - before resuming the original downward trend.
The pennant is a triangle-shaped pattern where prices consolidate, and currently ether is trading along the lower boundary of that formation near $2,130, according to data provided by LSEG.
A decisive break beneath this lower boundary would raise expectations that ether could fall to the $800-900 area.
However, a decisive break above the upper boundary of the pennant - currently just above $2,460 - would diminish the bearish risks and raise expectations of a further rise.
What the chart shows:
Ethereum suffered a sharp fall early this year
It has been consolidating in a triangle-shaped pennant pattern
A decisive fall below the bottom of the formation could raise expectations of a slide toward the $800-900 area
(Daily markets commentary from Reuters analysts on the signals financial charts are sending - and what they might mean.)
Christopher Romano is a Reuters market analyst. The views expressed are his own; Editing by Burton Frierson and Nia Williams
