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As of writing, the price of ETH is trading at $3,768, with daily losses of 4.93%, weekly gains of 3.78%, and monthly gains of 20.86%.
The Ethereum token faced strong rejection as it was unable to break above the key resistance level at $4,100. This range has not been seen since December 2021.
In this way, the Cryptocurrency was unable to position itself above USD 4,000 and experienced a significant correction.
It should be noted that according to IntoTheBlock, last week ETH investors accumulated more than a billion dollarswhile the net flow observed on December 4 was 104,000 ETH.
What is driving the price of ETH down?
The factors driving the price of ETH downward are related to the BTC correction.
The Altcoin market needed Bitcoin to position itself above USD 100,000 to continue to have momentum. But the largest cryptocurrency by market capitalization experienced a pullback below that key line.
Other analysts mention that, in turn, the price of BTC and ETH are influenced by macroeconomic concerns: mainly the shares of Nvidia (NVDA) saw a large decline after the news that this company would be investigated for monopoly.
Other important macroeconomic data is China’s inflation data, which showed that China’s CPI in November rose 0.2% year-on-year, representing the weakest growth in five months.
Finally, it is worth mentioning that the decline of BTC is led by a slowdown in the activities of the whales, since there is a decrease in their activity.
ETH Chart Analysis: Key Levels
After a roughly 8% rally last week, ETH price hit strong resistance around $4,100. This is how the correction originated and now the price is clinging to the support around the 100 EMA or $3,680.
Analysis of ETH charts. Source: TradingView.
The next support level is USD 3,490, a level from where the price found bottom and rebounded today. If the previous level is lost, then the price would find a floor around the 200 EMA or the current 3,430 USD.
As for resistance, USD 4,100 represents a double top, given that this level had already been reached on March 11. So it is the most important line to overcome in the short term and on the way to $4,733, which is the all-time high.
In between these two levels there is another resistance at USD 4,400, the price may face setbacks before reaching said level.
Finally, what the RSI at 30 points tells us is that ETH could be close to oversold. This range is not enough to say that there will be a rebound, but it could be a sign that the worst is over in terms of the fall of ETH.
Is ETH on the brink of a major rally?
Despite the correction, several analysts believe that the price of Ethereum is on the verge of a rebound towards levels as high as $7,300.
For example, X Venturefounder user analyst predicts such a rally based on the formation of the cup and handle pattern:
$ETH is waking up.#Ethereum is breaking out this 2-year-old, gigantic cup-and-handle formation:
Eleven $3,800 has been made support,
The next price targets are:
$4,900
$5,349
$6,457
$7,238
Timeframe: by end of Q1 2025 latest. pic.twitter.com/DyZI0I2PyF
— venturefounder (@venturefounder) December 4, 2024
«ETH is waking up. Ethereum is bringing to light this gigantic cup and handle formation from 2 years ago: Once $3,800 of support has been obtained, the next price targets are: $4,900, $5,349, $6,457, $7,238. Time frame: end of the first quarter of 2025 at the latest.
Other analyzes point to a decrease in the supply of ETH on centralized exchanges. Well, platforms like Coinglass point out that In the last week, more than 363,000 ETH were withdrawn and the total supply was reduced by 15 million ETH. On the other hand, the number of ETH in Staking is 34.3 million ETH and there is a growing increase in the number of ETH validators, which already exceeds 100,000.
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