Momentum will push ETH back under $4000?

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Ethereum registered one of the largest daily corrections on the 3rd of December. After consolidating above $4800, the drop was gigantic. At the moment, Ether is undergoing a recovery. The price is above $4000 but bearish momentum is likely going to pile further.

At press time, Ethereum had a market cap of $500 billion with a 24-hour trading volume of $27.6 billion.

Ethereum 4-hour time frame

Source: Trading View

As mentioned earlier, Ethereum declined down to $3500 at one point. Hourly-correction recorded is close to 15% which increased buyer’s panic. Yet, Ethereum is recovering at the moment with prices rising to $4200. However, the level of bounce is meeting strong resistance. At $4300, the price is possibly going to drop from now on. $4291 is 0.618 Fibonacci which is currently a major bearish retracement.

Bollinger Bands are currently flowing in divergence, which is inferring rising volatility for the asset.

Source: Trading View

Market indicators are collectively bearish in the markets. Relative Strength Index indicated rising selling pressure as the indicator was dropping. MACD remained under a bearish trend as the signal line is presently hovering above the MACD line.

Similarly, On-Balance-Volume is representing a fall, suggestive that selling pressure remains high in the chart.

How to invest in Ether right now

Investors should prepare for further corrections in the short term. The market is forming a strong bearish pattern in both the short and long time frames. The possibility of a drop under $4000 remains higher for the largest Altcoin. The local bottom valuation is currently $3500 hence the chances of re-test remains valid. In addition to that, volatility remains at a peak, therefore leverage trades should be avoided.

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