The Ethereum price hovered around the liquidity zone below $1220 for quite a long time and quickly dropped heavily below $1200 to mark the bottom. However, at the beginning of the year 2023, the price inflated significantly and soared high to mark the yearly high of $1344 within just a couple of days. Meanwhile, the bears have dragged the levels lower which appears to get intensified in the coming days.
It is worth noting that the trading volumes have dropped considerably and moreover, the bullish volume has slashed largely. Additionally, the deliverances for trend reversals have already formed. Therefore, even if the ETH price bounces back to the interim resistance may face a strong rejection that may drag the price lower below $1280 initially.
With the first leg down, the ETH price may drop notably to test the immediate support levels at $1284. If the bulls fail to hold at this level then the plunge may get intensified and reach below $1250 and maintain a horizontal trend for a while. Further, the possibility of re-entering the liquidity still prevails if the bears manage to take back control of the rally.
Such a steep plunge may occur only if the market undergoes a steep bearish pressure led by some events. However, to undertake a notable upswing, the price is required to undergo a notable descending trend. A popular analyst believes that the ETH price may retrace from $1283 to $1235 to get triggered towards $1600, as ETH meets resistance at the X-axis of an ascending triangle.
To do so, the Ethereum price which has been witnessing a slight pullback from the interim highs needs to rebound and reclaim the levels at $1355. The current rejection may certainly not be considered the end of the bullish trend, but a minor consolidation to propel high.
Source: https://coinpedia.org/price-analysis/bearish-flags-flutter-for-ethereum-is-it-the-right-time-to-plunge-back-below-1250/