The second most popular cryptocurrency, Ethereum, is trading just above the middle line of the descending parallel channel as seen on the daily charts. A descending parallel channel is a significantly bearish chart pattern that shows an ongoing downward trend as long as an asset’s price stays within the bounds of the descending channel.
Ethereum Is In The Critical Zone
The descending channel chart pattern for Ethereum marks an 8% drop from the current price to mark the bottom of the channel at $3,515. The bearish moving averages and the position of the RSI indicator at 41.53 highlight the bearish outlook for Ethereum, suggesting that the bears are dominating the market. Also, the MACD indicator confirming the downtrend adds confidence to a possible downward move in ETH price.
On the upside, Ethereum price is facing a resistance at $3,920 represented by the 100 MA. If this happens, Ethereum price could potentially retrace the losses that started on December 1 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 MA is located, and $4,337.
Other Scenario and General Trend
Ethereum bulls will need support from the broader market to break the descending parallel channel emphasis and start the targeted upside trend to the $4,840 top. In case the momentum is caught, the determination of the $ 5,000 peak is not even intimate.
The largest altcoin, Ethereum, has recently outperformed the leading cryptocurrency Bitcoin, but has lost more than 5% on the daily timeframe. The overall cryptocurrency market outlook is red, with no clear directional signal.