Ethereum has plummeted lower today concurrently with Bitcoin’s drop below $8,000, which points to an underlying bearishness for the aggregated crypto market and may mean that significantly further losses are in store for ETH before it is able to find support and climb higher.

One analyst is now noting that Ethereum is caught in a technical formation that may lead it as low as $140 in the near-term, but is also noting this price level may spark the next bull run that sends it surging higher.

Ethereum Plummets Towards $170 as Bears Take Control of Crypto Markets

At the time of writing, Ethereum is trading down nearly 3% at its current price of $172.5, which marks a notable drop from its daily highs of nearly $180 that were set yesterday.

It is important to note that ETH did find some support around $170 overnight, but the lack of follow through on its subsequent bounce may signal that bulls do not have any notable strength at the moment.

Importantly, Ethereum does currently have strong fundamentals in spite of its current bearishness, as Spencer Noon – a popular figure within the crypto industry – recently noted that a significant amount of ETH is currently locked up in DeFi, meaning that the DeFi trend is leading to a lower circulating Ethereum supply.

“$ETH: price vs. fundamentals,” he concisely noted while pointing to the below charts.

Assuming the DeFi trend continues to garner widespread support and utilization, it is probable that even more ETH will be temporarily removed from circulation, thus reducing the circulating supply and creating supply side pressure.

ETH May Dip Lower Before Next Uptrend Begins

The Crypto Dog, a popular cryptocurrency analyst on Twitter, explained in a recent tweet that Ethereum appears to be caught in a large falling wedge, which may mean that it will drop as low as $140 in the near-term before it breaks above the upper boundary of this wedge and surges higher.

“That mini-falling wedge played out on $ETH, looks like a larger one may be forming now. Unclear yet if we get another “big drop” across the board, but if we do, I’m eyeing ~$140 to stack up a FAT long. If we break out and start trading above $190 again I’ll long to new highs,” he explained.

That mini-falling wedge played out on $ETH, looks like a larger one may be forming now. Unclear yet if we get another "big drop" across the board, but if we do, I'm eyeing ~$140 to stack up a FAT long. If we break out and start trading above $190 again I'll long to new highs. pic.twitter.com/dybaIHAbee — The Crypto Dog? (@TheCryptoDog) October 17, 2019

The coming few hours and days will likely elucidate whether or not the aforementioned technical formation will play out, or if it will be able to surge higher based on strengthening fundamentals.

Featured image from Shutterstock.