A widely followed crypto analyst is warning that Ethereum (ETH) could collapse in value after failing to hold a key level.

In the latest edition of the trader’s altcoin newsletter, pseudonymous crypto trader Rekt Capital warns that Ethereum could dip below $3,000 based on historical precedence.

“Ethereum is in a complicated spot. Because it has rejected from the green $3,956 resistance, similarly as in the past (red circles).”

The trader believes that Ethereum needs to hold the level around $3,342 or it could move down much further to the $2,700 level.

“A weekly close below the orange box [around $3,342] would likely trigger a breakdown whereas consistent holding of the orange box as support should be enough in building momentum for the next leg up.”

If ETH does dip into the $2,000s, the trader says he will still remain long-term bullish on Ethereum.

“Whatever the scenario, ETH needs to reclaim this orange boxed area as support (blue circle) to enable uptrend continuation.

So whether ETH does that now to precede a rally to ~$4,000 or whether it needs to first drop into the ~$2,700s before doing so doesn’t make much of a difference in the long-term because macro uptrend is bullish, but offers dollar-cost-averaging opportunities in the short-term.”

Ethereum is trading for $3,340 at time of writing, down more than 4% in the last 24 hours.

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