On December 9, Ethereum hit a new high for the current year, rising to the $2403 level, but subsequently faced a sharp decline. ETH is currently approaching an important horizontal support, raising questions about whether it will break through it.
Ethereum's price has been rising strongly since early October, and on Nov. 5, there was a break of the descending resistance line, followed by an acceleration in growth. Recently, after a small bounce from the horizontal resistance area, ETH reached a new yearly high at $2403.
However, token prices have begun to fall, and today's decline was particularly sharp, with a drop to a low of $2145, followed by a small rebound. Market observers note that ETH last showed such weakness against bitcoin in June 2022. The RSI relative strength indicator is giving mixed signals: it was green at first, after which it declined but still remains above the 50 level.
There is a clear bullish trend on the weekly chart, especially after breaking the long-term horizontal resistance area of $2000. This resistance area has been present on the chart since April 2022, and overcoming it could lead to a significant rise in price.
Trader Daan Crypto believes that the price decline today was caused by the liquidation of long positions using leverage. In his words, "People were using too much leverage and the price wasn't rising. It just needed a little push for all those positions to merge together and cause the contraction we are seeing."
With interest recovering, ETH's upward movement could continue. The weekly RSI also supports the upside outlook, sitting above the 50 level and heading upwards. The next significant long-term resistance on the weekly chart is the $3500 level, which, if overcome, could lead to a 60% price rise.
However, a weekly ETH close below $2000 could cancel the bullish trend. In this case, the price is likely to go 30% down to the next support level around $1500.
