As a seasoned crypto investor with battle-hardened nerves and a portfolio that resembles a roller coaster, I find myself closely monitoring Ethereum‘s dance within the critical $3.5K–$4K range. The recent bounce from the lower boundary at $3.5K has ignited hope in me and fellow bulls as we gear up for another push toward that stubborn $4K resistance.
Currently, Ethereum is fluctuating around the important price points between $3,500 and $4,000. Lately, it has found some stability near the lower end of this range around $3,500.
Following this rebound, the bulls are attempting a renewed push toward the $4K resistance level.
Technical Analysis
By Shayan
The Daily Chart
The price rise for Ethereum temporarily halted near the $4,000 barrier, which serves as a significant selling point. This resistance caused a drop in value, moving it back to the lower limit of the range at $3,500. But buying activity resumed at this support level, leading to another powerful surge aimed at retesting the $4,000 mark once more.
The important level of $4,000 aligns with Ethereum’s previous peak points and has consistently thwarted bullish attempts. This suggests that in the short term, we might see more consolidation between $3,500 and $4,000. If Ethereum manages to break above $4,000, it could potentially trigger a broader upward trend.
The 4-Hour Chart
Over the span of 4 hours, Ether (ETH) encountered a significant pushback at the $4,000 resistance level, leading to a swift drop that fell beneath the midpoint of its ascending channel at approximately $3,800. This rapid descent suggests a substantial number of sellers are present around the $4,000 mark, creating a tough hurdle for buyers to surmount.
Even though Ethereum experienced a dip, it managed to find a strong base around the $3.5K mark, leading to increased demand. This boosted interest resulted in a surge of bullish energy that lifted the price back over the midline of its channel, almost reaching the $4K barrier again.
While buyers remain eager to breach the $4K threshold, bearish divergence on the RSI indicator signals caution. A short-term consolidation below this resistance appears likely before another potential bullish breakout.
Onchain Analysis
By Shayan
The way Ethereum’s price is holding steady around the $3.5K mark suggests a large amount of liquidity accumulated beneath this point, as indicated by Binance‘s liquidation heatmap. On the other hand, the $4K level signifies another important area of liquidity, mainly linked to short positions that were set up in expectation of price reversal at that point.
At present prices, these two levels exhibit the greatest amount of liquidity. If Ethereum (ETH) manages to break through the $4K barrier, it might set off a chain reaction of short sellers closing their positions in a hurry. This rapid response could lead to a swift price increase as the unwinding of these positions propels further upward movement.
However, a breakout in either direction has the potential to ignite a liquidation cascade, intensifying the subsequent price movement. Given the prevailing market dynamics, a bullish breakout above $4K appears to be the more probable scenario.
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2024-12-12 17:32