Ethereum continues to exhibit signs of recovery despite recent price declines. We look at key levels and factors that may impact the ETH market.
Current Market State of Ethereum
As of the article's writing, Ethereum (ETH) is trading at $3,433, experiencing a 2% decline in the past 24 hours. Trading volume has dropped by 18%. Over the last week, the asset has declined by 7%, and on December 20, it fell below the support zone of $3,101, a level not seen for over a month. The Relative Strength Index (RSI) stands at 44, indicating that Ethereum is approaching oversold conditions, which may suggest a potential short-term rebound if buying interest returns.
Technical Analysis and Key Levels
Ethereum’s price chart forms a Descending Right Angle Broadening formation, often interpreted as a bullish reversal pattern. This structure consists of two diverging lines—one acting as horizontal resistance and the other as bearish downward-sloping support. The pattern resembles an inverted ascending triangle, a setup that often leads to upward price movements once it breaks above resistance. Key levels to monitor are resistance at $3,713 (R1) and $4,159 (R2), with support at $3,136 (S1) and $2,953 (S2).
On-chain Data and Market Sentiment
Meanwhile, Ethereum’s on-chain data reflects a significant reduction in exchange supply. Following last week’s record-breaking net outflow of $1.2 billion—the largest exchange withdrawal in Ethereum’s history—another $35.93 million worth of ETH has been withdrawn from exchanges since the start of the week, according to Coinglass. This decline in available ETH and sustained negative exchange netflows could result in a supply squeeze, as demand increases while availability shrinks.
Ethereum’s funding rate has moved into positive territory at 0.0089%, indicating that long traders are becoming more dominant. This suggests a shift in market sentiment towards bullishness.
ETH is currently trading above the Ichimoku Cloud, a technical indicator that signals strong support. However, should bearish forces regain control, Ethereum could see a decline toward $3,111, with a potential dip below $3,000 if selling pressure intensifies.
Ethereum shows signs of recovery with bullish patterns and reduced exchange supply. However, caution remains important due to potential bearish pressure.
