Ethereum price prediction is bearish as it trades below the December down trendline. ETH’s inability to reclaim the $4,000 crucial level is a suggestion that selling the largest altcoin my market cap remains a threat.
Ethereum’s (ETH) price action has been uneventful in the first few days of 2022 and it continues to languish below the $4,000 psychological level. The Crypto Fear and Greed Index is in the Extreme Fear zone registering a value of 23/100 on Tuesday.
However, according to Ecoinmetrics, an on-chain resource analysis company, stages of extreme fear rarely linger for long, meaning they have a downside of around 30 days.
Ethereum continues to garner support from various quarters. Yield-boosting application Convex Finance continues to allow users to access liquidity and earn fees from Ethereum-based stable coin exchange Curve Finance. Convex Finance crossed the $20 billion mark in total value locked (TVL) on January 02, days after becoming the second-largest decentralized finance (DeFi) protocol by TVL, pointing to increased adoption and utilization of Ethereum as a Layer-1 protocol.
Can Ethereum turn away from the downward price action and rise above the December downtrend line to start a rally?
Ethereum Price Prediction: The Bearish Leg To Continue As $3,500 Looms
Ethereum’s failure to rise above the $4,000 psychological level suggests that bears are selling on every minor rally. Ethereum’s rebound off the $3,617 to $3,577.68 support zone has reached $3,800 level where the bears are mounting a stiff challenge. The 50-day Simple Moving Average (SMA) down-sloping and the relative strength index (RSI) is positioned at 41.45, indicating advantage to bears.
ETH/USD Daily Chart
The position of the Movign Average Convergence Divergence (MACD) indicator below the zero line in the negative region and the declining transaction volume is an indication that the bears have an upper hand.
If the price continues lower, the bears will again try to pull the Ethereum price below the support zone. If they manage to do that, the price of the smart contract giant’s token could start its downward journey to tag the $3,200 support level.
On the other hand, the bearish Ethereum price prediction could be invalidated if bulls push the price above the downtrend line and then above the moving averages. If this happens, it will suggest that the corrective phase is over with a rally $4,643 being the next logical move.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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Source: https://coingape.com/ethereum-price-prediction-eth-might-drop-below-3500-level/