Ethereum (ETH) price forecasts tend to be bearish as December trades below the downtrend line. The failure of ETH to retrace the critical level of $4,000 is an important indicator that the selling pressure continues in the markets.
Ethereum’s (ETH) price action has been smooth in the first few days of 2022 and remains below the psychological level of $4,000. The “Fear and Greed Index” falls in the “Extreme Fear” region, recording 23/100 on Tuesday.
on the other hand Ethereum continues to receive support from various circles. Yield-boosting app Convex Finance continues to allow users to access liquidity and earn fees from Curve Finance, the Ethereum-based stablecoin exchange.
Days after Convex Finance became the second largest decentralized finance (DeFi) protocol in terms of total locked value, it crossed the $20 billion mark in total value (TVL) locked on Jan. pointed.
Can Ethereum break above the December downtrend line to abandon the downside price action and start a rally?
Ethereum Price Forecast: Bear Leg To Continue At $3,500
The failure of Ethereum to rise above the psychological level of $4,000 indicates that the bears are selling on every minor rally. Ethereum’s recovery from the $3,617 to $3,577 support zone reached $3,800, where the bears are posing a tough challenge. The 50-day Simple Moving Average (SMA) is sloping down and the relative strength index (RSI) is positioned at 41.45, which technical data points to an advantage for the bears.
ETH/USD Daily Chart
An additional indication that the bears are taking advantage can be seen, given the MACD indicator is located below the zero line in the ‘negative zone’ and the declining trading volume.
If the price continues to drop, the bears will again try to push Ethereum price below the support zone. If the bears manage to do so, the smart contract giant’s native token price could begin its journey towards the $3,200 support level.
On the other hand; If the bulls push the price above the downtrend line and then above the moving averages, the downtrend Ethereum price prediction may be invalid. If this happens, it will mark the end of the correction phase with a rally to $4,643 which is the next logical move.
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.