According to a Delphi Digital report, which was obtained by Hard Fork, Ethereum is positioned to face more pain in 2019. The top altcoin by market capitalization is on the brink of forming a death cross on its 1-day price chart.
An imminent sell-off
A death cross is a much-feared technical indicator, which, as the name suggests, acts as a harbinger of a major market downturn. It is formed when the coin’s 50 DMA crosses below its 200 DMA.
Ethereum has only witnesses this “deadly” pattern five times throughout its entire existence, and its next occurrence will almost certainly lead to a brutal sell-off.
The historical precedent for such an event is quite limited given its relatively short price history, but in the three prior instances, ETH’s average loss in the following 14 and 30 days was 6 percent and 7 percent, respectively,” said Delphi Digital.
The Vitalik Buterin creation, which gave birth to more than 200,000 ERC20 tokens, was the darling of the crypto industry back in 2017 when the ICO craze reached its peak. In June 2017, Ether’s dominance surpassed 31 percent, which made many believe that it could potentially “flip” Bitcoin.
However, as of now, Ethereum is down heavily against Bitcoin with its market share inching closer to a minuscule seven percent. Despite a two percent pullback, BTC’s dominance rate remains above 70 percent.