The price of Ethereum (ETH) has experienced significant movements in these last weeks of the year 2023.
Initially, Ethereum saw a rise from $1,800, forming a solid bullish channel, according to our technical analysis of the asset.
However, on December 11, there was an abrupt drop with strong sales around $2,400 to $2,300, breaking down the aforementioned channel.
This decline brought the price around $2,100, momentarily losing trendline support.
Ethereum is currently trying to reclaim this bullish channel, but is facing considerable resistance from sellers, who are trying to establish a bearish channel.
However, it is essential to consider the news about the extension by the United States government in the approval of exchange-traded funds for ETH, as this news has generated some decrease in enthusiasm around the asset.
The correlation between Ethereum and Bitcoin continues to be a determining factor
Ethereum’s dependence on Bitcoin’s behavior is evident, and any significant movement in Bitcoin’s price is likely to have repercussions on Ethereum.
Despite the current challenges, analysts suggest that if Ethereum manages to overcome key technical resistances, there is the potential for a rally towards $2.4K and possibly higher levels in the near term.
Despite the short-term fluctuations, many analysts maintain a bullish long-term outlook for Ethereum.
Technological innovation, the growing adoption of decentralized applications (dApps), and planned network upgrades such as Ethereum 2.0 continue to be critical catalysts that could support a sustained increase in Ethereum’s value in the coming months and years.
Investors should maintain a balanced view and consider the risks associated with the current market situation.
Bearish technical signals such as the head and shoulders pattern on the daily chart, along with the bearish divergence on the RSI indicator, suggest the possibility of a downward correction.
Therefore, establishing risk management strategies and being cautious about possible market movements is essential for those looking to invest in Ethereum in the short term.
Technical charts courtesy of Trading View.
Disclaimer: The opinions expressed do not constitute investment advice. If you are looking to make a purchase or investment, we recommend that you always do your own research.
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