Let’s take a look at the second cryptocurrency in terms of market capitalization, Ethereum, and try to figure out the direction it will take in the near future:
The Ethereum chart has been moving within a strong upward channel for the past 4 months. At the beginning of the week, the price tested the lower border of the figure twice, forcing buyers to activate and push the price higher to the $3,800 – $3,900 area.
As a result, the chart managed to approach the uptrend line, which can be considered a classic retest after Ethereum broke an important level. If the asset is able to overcome the $3,900 mark and gain a foothold above it in the daily timeframe, then we can expect a new cycle of growth to begin.
However, this scenario is less likely than a fall. Based on the technical analysis, the asset has been in a local downtrend for the previous month. The key level is fixed in the $3,650 zone, which coincides with the lower border of the channel. If the chart breaks this level and consolidates below it, then we may see a strong reaction from sellers.
Thus, Ethereum may decline to the next significant support level in the $3,300 – $3,400 area. This indicates a potential price drop by approximately 12-14%. It was exactly the zone where the price had stopped right prior to the latest uptrends that started in August and September 2021.
The current market situation is not conducive to new purchases. Now, we see a significant decrease in the intraday volatility, which means that the number of market participants has decreased. This inevitably leads to lowering prices. Considering the fact that the vast majority of people are preparing for the holidays, Ethereum and the rest of the altcoin market will most probably plunge in the coming days.