Following Monday’s market-wide correction, which has many market participants wondering whether we are officially in a bear market, all the top 30 cryptos are flashing red. After falling as much as 11% on December 13, Ethereum Price Analysis has once again fallen below the critical $4,000 level.
ETH is down 5.42 percent on the day and is currently trading near $3,783.
Ethereum Price Analysis Is Encountering Stiff Upward Resistance
On the daily chart, Ethereum price has formed a falling pennant as its upward movement is hampered by several obstacles. ETH is currently encountering immediate resistance from the 100-day Simple Moving Average (SMA) at $3,909. Even if Ethereum bulls are able to push the smart contracts giant token above this level, it will be met with resistance from the pennant’s resistance line, which is currently around $4,200.
A break above the pennant will be met with significant resistance from the 50-day SMA, which is currently at $4,345.
Daily ETH/USD Chart
Furthermore, on-chain metrics from IntoTheBlock’s In/Out of the Money Around Price (IOMAP) model validate Ethereum’s rapid rise. The IOMAP chart shows that there is stiff upward resistance and that the immediate resistance embraced by the 100-day SMA around $3,900 is within the $3,892 to $4,006 price range where approximately 1.31 million addresses previously purchased approximately 3.04 million ETH. These investors may want to break even before attempting to push the Ethereum price above this level.
Iomap Ethereum Chart
As a result, the Ethereum IOMAP chart indicates that the path of least resistance for Ethereum price is downward.
As a result, a drop below the immediate support around $3,700 embraced by the pennant’s support line will add fuel to the current bearish fire, potentially leading to a deeper correction towards the psychological level of $3,500.
The downward movement of the Relative Strength Index (RSI) and the downsloping moving averages since November 08 lend credence to Ethereum’s pessimistic outlook.
Furthermore, ETH’s bearish thesis is validated by the decreasing daily trading volume and the downward movement of the Moving Average Convergence Divergence (MACD) indicator below the zero line in the negative region.