December 22, 2021 / Analytics

Ethereum Price Analysis: ETH/USD Is In Danger Of Dropping

ethereum forecast

A reversal is expected in Ethereum (ETH) cryptocurrency market, as ETH/USD has consolidated above the support barrier around $ 4,000. Therefore, the coin should rise in price to $ 4,300 by December 29.

Key Points

  • ETH price is trading above 100 hour moving average ($ 3,945).
  • An uptrend line has formed on the hourly chart with support at $ 3,800.
  • The nearest resistance barrier is located at $ 4,340.

Traders started pumping Ethereum price on December 20, and in 12 hours ETH went up by 8%. Three factors point to the continued bullish trend in the medium term. First, the coin’s rate has broken through the contracting triangle, which has been forming since December 1. Secondly, the price of the asset is fixed above the exponential moving averages of EMA Ribbon indicator. Thirdly, the cost of cryptocurrency remained in the range above the 38.2% Fibonacci level, taking into account the pump, from $ 2,650 to $ 4,865.

eth chart

These facts indicate that ETH price will increase to $ 4,300 and reach 23.8% Fib. A downtrend will occur if during the next session the value of an asset falls below $ 4,000. In this case, the coin could fall in price to a strong support barrier at $ 3,760. However, judging by the current data, the probability of a dump without correction to $ 4,300 is extremely small.

Ethereum Price Is In Danger Of Dropping

The downtrend ended within the fourth wave of the bullish trend that started in July. According to the wave theory, ETH rate should up during the fifth wave and renew its  ATH. But one factor raises concerns for a bright future for the digital asset. The bottom of the fourth wave was significantly lower than the peak of the first wave, which speaks in favor of the continuation of the downtrend. In addition, during the last correction, the trading volume decreased, and the cryptocurrency rate did not exceed 23.6% Fib, taking into account the pump, from $ 1,700 to $ 4,865.

eth chart

A head and shoulders pattern is forming on the chart. If the pattern is completed, then within a month the rate of the coin will drop to the neck level ($ 2,600-2,700), then it will correct to $ 4,000 (right shoulder) and collapse downward. After the neck is broken, Ethereum value will fall by an amount equal to the head’s height. That is, the rate of the coin can be reduced to $ 390.

eth chart

Technical indicators:

  • 4 hours MACD is in a bullish trend zone.
  • 4 hours RSI is above 60 (in the neutral zone).
  • Major Support Level is $ 3,760.
  • Major Resistance Level is $ 4,340.
  • The nearest pivot points are $ 3,902 and $ 4,163.
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