On Monday, veteran trader Peter Brandt took to the social media channel X (previously known as Twitter) to reveal that he had taken a short position on ethereum (ETH), the crypto market’s second-largest asset by valuation. He further shared a technical chart with his 707,000 followers on X to illustrate his strategy.

Brandt Takes Short Position on Ethereum, Suggesting Price Plunge

Since the beginning of 2023, ethereum’s value has surged by 85% in comparison to the U.S. dollar. This increase in ether’s price can be attributed to several key factors. The crypto community has been buzzing with talks of a potential spot ethereum exchange-traded fund (ETF) getting the nod from the U.S. Securities and Exchange Commission (SEC), fueling a bullish outlook in the market. Additionally, onchain analytics show a noteworthy uptick in ETH accumulation by major holders, or ‘whales’, signaling a positive shift in market dynamics.

In the past fortnight, however, ETH’s upward trajectory has plateaued, experiencing a minor 1.4% dip in its value against the greenback. On Dec. 18, 2023, veteran trader Peter Brandt, active in the markets since 1975, showcased an ETH/USD chart from Tradingview. Brandt stated, “Classical chart patterns in price charts are not sacred – they fail to perform according to the textbooks all the time,” Brandt wrote. “But, if the rising wedge in [ethereum] complies with the script, the target is $1,000, then $650.”

Brandt added:

I shorted ETH on Friday — I have a protective [break-even stop].

Shorting in financial markets essentially involves a wager against the asset, in this instance ETH, and anticipating a decline in its value, which, if it occurs, results in profit from the short position. Echoing Brandt’s sentiment, Adamant Capital founder Tuur Demeester pointed to a chart illustrating ETH’s performance against BTC over five years. Colin Talks Crypto concurred, stating, “Supporting this is the fact that ETH/BTC looks horrible and soon to break down too. My guess is BTC ETFs are the straw that breaks this camel’s back.”

The ethereum (ETH) chart does display indications of a potential reversal, though the pattern in Brandt’s chart isn’t completely formed yet. Presently, there’s an observed bearish pattern marked by consistently flat lower highs and a succession of lower lows, suggesting that sellers are currently more assertive than buyers. Nonetheless, it’s common for crypto assets to experience periods of low trading volume during holidays, a situation bears might capitalize on. Consequently, it’s quite plausible that ether’s descending triangle formation might be a temporary phenomenon.

Brandt has been vocal about his views on crypto assets and economic matters for an extended period. In August, when discussing the impending Bitcoin halving, Brandt labeled the reward reduction as a “non-event.” Previously, in June, the experienced trader advocated for the U.S. Federal Reserve to increase the benchmark interest rate by 100 basis points. He also holds the opinion that bitcoin (BTC) is a legacy coin, while dismissing most other cryptocurrencies as mere “make-believe crypto wannabees.”

What do you think about Peter Brandt shorting ether? Do you agree with what he has said? Share your thoughts and opinions about this subject in the comments section below.