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Ethereum forming a double top? ETH price loses 12.5% amid Evergrande contagion fears

Ethereum's native asset Ether (ETH) prices slumped on Sept. 20 amid a broad selloff in the cryptocurrency market, led by worries about a potential housing bubble crisis brewing in China.

The ETH/USD exchange rate dropped as much as 12.52% to $2,911 on the Coinbase exchange, hitting its lowest levels since the beginning of August 2021. Elsewhere in the crypto market, Bitcoin (BTC), Binance Coin (BNB), Cardano (ADA), Solana (SOL), and other top tokens plunged in tandem.

The performance of top ten crypto assets in the past 24 hours. Source: Messari

The drop imitated the mood in the broader market as United States equities plunged following a day of red in both the Asia-Pacific and European indexes. On the other hand, the U.S. dollar and government bonds surged on haven-buying.

At the core of Monday's sell-off was a liquidity crisis at Chinese property developer Evergrande. The world’s most indebted property developer faces obligations of more than $300 billion to creditors. That also includes a critical interest payment deadline on its offshore bonds, arriving on Sept. 23.

DW noted that if the Evergrande topples, it could bring many banks down with it, same as the Lehman brothers did during the 2008's housing bubble crisis in the United States.

Although Ether does not trade in sync with global markets, its 30-day correlation with Bitcoin, the leading digital asset exposed to macroeconomic fundamentals, sits near 0.85. As a result, the altcoin appeared to have faced an indirect consequence to China's looming housing crisis.

Bearish pattern triggered

The latest bout of selling in the Ethereum market also triggered a classic bearish pattern, which has a 75% accuracy when it comes to hitting its downside targets.

Dubbed the "Double Top,' the pattern develops after the price rallies strongly, pulls back, rises again towards the previous peak, and corrects all over again — all while standing atop the so-called neckline su...

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