Ethereum Tests Support Trendline: Can Bulls Target $3,568?

Will Ethereum (ETH) trigger a triangle breakout rally in the new year, potentially reaching the next supply zone above $3,500?

With Bitcoin dropping below $93,000, Ethereum struggles to maintain critical levels. The bearish pressure on the price chart intensifies, and institutional support is at risk.

Despite these challenges, Ethereum shows potential for a bounce back. Can the ETH price trend reverse in a V-shaped pattern, leading to a breakout rally to $3,568?

Ethereum Price Analysis

Amid increasing price volatility in Bitcoin, Ethereum has fallen below the $3,400 mark. While respecting the local support trendline, Ethereum has consolidated slightly above the $3,300 mark.

Notably, the current market price of a single Ethereum token is $3,345. The sideways trend on the 4-hour chart shows a compression over the past few days, forming a short-term triangle pattern that suggests an explosive move ahead.

As bearish pressure grows on the Ethereum price chart, the dynamic average lines align in a bearish pattern. Specifically, the recent negative crossover of the 100-EMA and 200-EMA lines signals a sell signal.

Supporting the bearish outlook, the 4-hour RSI line struggles to stay above the halfway point. Meanwhile, the lack of bullish divergence at the support trendline indicates weak underlying demand.

Ethereum ETFs Bleed $55.41M

Similar to Bitcoin’s spot ETF, Ethereum is experiencing outflows. On December 30, Ethereum saw a daily net outflow of $55.41 million, with Fidelity withdrawing $20.41 million. With no Ethereum ETFs seeing inflows on Monday, institutional support has taken a hit.

ETH Price Targets

As Ethereum prepares to bounce off the support trendline, overhead resistance is formed by the trendline and the 50-EMA line. For a bullish continuation, Ethereum must maintain support above the $3,400 mark.

With growing anticipation of a new year rally in the crypto market, a potential breakout rally could challenge the overhead supply zone at $3,568. On the other hand, a triangle breakdown would test the $3,244 support level.