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Ethereum Price Analysis: Is ETH Doomed to Slump to $3K After Getting Rejected at $4K?
As the price of Ethereum (ETH) has failed to reach new heights, a sense of unease has settled over the cryptocurrency market. The asset’s inability to breach the $4,000 resistance level, coupled with a sharp rejection, has sparked concerns that ETH may be doomed to plummet towards the $3,000 mark.
In order to gauge the potential trajectory of ETH’s price movement, it is essential to analyze its technical and fundamental aspects. From a technical standpoint, the recent rejection at $4,000 has formed a clear double-top pattern on the 4-hour chart. This bearish reversal could potentially lead to a deeper correction or consolidation before resuming its upward momentum.
Furthermore, the daily chart illustrates that ETH’s price has entered a bullish phase since early November after rebounding from the crucial $2,300 support level. However, the failure to break through the $3,500 resistance mark and the subsequent drop has led many market participants to speculate about an impending slump towards the $3,000 zone.
In this context, sentiment analysis is also crucial in determining whether the bearish momentum will be sustained or not. According to recent data from the futures market, the Taker Buy Sell Ratio metric has been trending downwards for over a year now and continues to plummet. This suggests that the current correction might be driven by aggressive selling pressure emanating from derivatives traders rather than spot market participants.
As such, it is difficult to envision ETH’s price recovering in the near future as long as this metric remains in bearish territory.
Source: cryptopotato.com
