The Ethereum price is undergoing a major test. Ethereum’s year-to-date price chart featured as the “chart of the day” makes that point.
As seen below, Ethereum made an all-time high in the second week of June after which is continued to make a series of lower highs. That can be bearish. However, it can also set a pattern known as a bullish flag: after some lower highs, it stops falling and continues to rise.
This is the type of pattern that tests the nerves of both bulls and bears.
It is perfectly fine if Ethereum consolidates for a while. Typically, during such a period, an asset gathers energy in order to continue its bull run. Bulls would hope that Ethereum does not fall below the $200 to $300 level. That is a wide range, for sure, but it is fine if Ethereum consolidates in there.
What bulls do NOT want to see is a continuous fall which will lead to levels below $200. That would indicate that the bull market is over for now. It could take many months, even more than a year, until the bull returns.
We do not think that Ethereum’s bull market has run its course. However, there is a fair chance to see a multi-week, even multi-month, consolidation. That would be a major test for Ethereum holders: strong hands will hold on tight, weak hands will sell … and that is exactly what this test is about.