Ethereum (ETH) The price dropped below the 100 Simple Moving Average (SMA) at $3,920 on Dec. 17, revealing a possible bearish prediction. The descending parallel channel chart pattern shows that Ethereum could see an 8% drop. To invalidate the pessimistic view, ETH will need to surpass the 100-day SMA resistance.
Ethereum Price Could Drop to $3,515
ETH price is trading around $3,877 just above the middle border of the descending parallel channel as seen on the daily chart. A descending parallel channel is a significantly “bearish chart pattern” that shows a downward trend that continues as long as an asset’s price stays within the bounds of the descending channel.
For ETH, the descending channel chart pattern marks an 8% drop from the current price to label the lower boundary of the channel at $3,515.
The downward sloping moving averages and the position of the Relative Strength Index (RSI) indicator at 41.53 highlight this bearish outlook for Ethereum, suggesting that the bears are in firm hands.
Also, the downward move of the Moving Average Convergence Divergence (MACD) indicator adds confidence to the ETH price bearish narrative.
ETH/USD Daily Chart
In the upward direction, ETH The bearish thesis may be invalidated if the price overcomes the immediate resistance at $3,920 covered by the 100 SMA. If this happens, Ethereum price could potentially retrace losses that started Dec. 01 by breaking the upper limit of the current chart pattern at $4,117.
However, any move could be blocked by stiff resistance at $4,430, where the 50-day SMA is located, and $4,337.
Ethereum bulls will need support from the wider market to overcome these hurdles which could see ETH price rise towards the top of the descending parallel channel at $4,840, followed by the next logical move to explore new prices above $5,000.
The MACD’s position above the zero line in the positive zone adds confidence to this bullish outlook.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.