Decentralized finance (DeFi) asset, Ethereum (ETH), has extended its recent declines as the general cryptocurrency market continues to tackle widespread bearish sentiment. At the moment, Ethereum has no lined-up catalyst that can trigger a price rally, with inventors monitoring the situation for possible indicators.
Bitcoincenter’s Ethereum rainbow chart is one of the tools investors use to monitor the possible ETH future price trend. The indicator deploys color bands that follow a logarithmic regression and makes estimates based on past performance to provide a potential insight into Ethereum’s long-term movements.
As of November 22, the Ethereum rainbow indicator had breached the ‘Fire sale’ spot, the lowest band on the chart. Notably, Ethereum last plunged below the level in March 2020 when the asset traded upwards of $100.
A review of the historical chart indicates after breaching the lowest band, Ethereum has embarked on a new rally. For instance, after the 2020 low, Ethereum rallied, culminating in the gains of the 2021 bull market.
It is worth noting that Ethereum has continued to slip under the ‘fire sale’ zone, although the rainbow chart remains bullish for the second-ranked cryptocurrency by market capitalization. In this line, the indicator projects that Ethereum will likely trade above $2,000 by the end of the year.
Ethereum price analysis
As things stand, Ethereum is trading at $1,085 after breaching the key support level of $1,100 with daily losses of about 3%. In this case, Ethereum may slip below $1,000 unless buyers take charge and push the price above $1,100.
The current Ethereum bearish trend has also spilled over to the technical analysis, with the summary going for a sell at 15. For moving averages, the daily gauges recommend a ‘strong sell’ at 15.
What next for Ethereum?
Furthermore, the Ethereum community on CoinMarketCap is projecting a positive end year for the asset. As reported by Finbold, the community members leveraging the price estimate feature projected that Ethereum will trade at $1,508 on December 31, 2022.
Despite the community’s bullish stand, Ethereum is still plagued by bearish sentiments, mostly emanating from the FTX cryptocurrency exchange collapse. The asset’s price is staring at a possible further crash after it emerged that the FTX “hacker” converted an additional 15,000 ETH worth over $15 million into Bitcoin (BTC).
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Source: https://finbold.com/ethereum-rainbow-indicator-hits-new-2-year-low-will-eth-crash-below-1000/