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Ethereum’s recent price action has left the crypto community in a state of uncertainty. As the digital asset failed to breach the crucial $4,000 resistance level, many are questioning whether this marks the beginning of the end for ETH’s bullish momentum. In today’s article, we will delve into the world of technical analysis and examine the possibility that Ethereum might plummet to $3,000.
The first thing that catches our attention is the daily chart. Here, it becomes clear that ETH has entered a bearish phase since early November. The recent price action can be attributed to the asset’s inability to break above the $4,000 level. As a result, we are seeing a loss of momentum and a decline in buying pressure.
The data reveals that ETH failed not once but twice to break above this critical level, forming a clear double-top pattern on the 4-hour chart. The neckline of this pattern is situated at around $3,500. Unfortunately for bulls, this important resistance zone has been breached to the downside. This raises concerns about the potential for further declines.
Furthermore, a look at the sentiment analysis reveals some disturbing trends. The Taker Buy Sell Ratio metric indicates that the selling pressure in the futures market is intense. In fact, it’s been trending downwards for over a year now. This suggests that the recent correction could be due to the aggressive selling in the derivatives market rather than the spot market. As long as this indicator remains bearish, a full-fledged recovery appears less likely.
In conclusion, based on the presented analysis, there are valid arguments to suggest that Ethereum’s price might slide towards $3,000. The double-top pattern and the Taker Buy Sell Ratio provide compelling evidence for such a scenario. It is crucial for investors to monitor this situation closely and be prepared for any eventuality.
Disclaimer: The data provided in this article should not be taken as investment advice. CryptoPotato advises all readers to conduct their own research before making any investment decisions.
Source: cryptopotato.com
