Ethereum Price Analysis: Bloodbath On Crypto Market Triggers Fallout From Descending Wedge Pattern

Since another recent bloodbath of December 4, 2021, the Ethereum coin price was trying to sustain above the $3650 support. The price action already provided three retests to this bottom support, and wobbling in a falling wedge pattern, the coin indicates a better probability for starting a recovery rally. However, the current selling pressure in the market has violated this support as well, suggesting extending price correction.

Ethereum Key technical points:

• The daily RSI line approaching the oversold region
• ETH Fear and Greed Index is pointing at the fear sentiment
• The 24-hour trading volume in the Ethereum coin is $29.4 billion, indicating a 131% gain.

Source-Tradingview

When we covered an article on Ethereum coin, the pair resonated in a falling wedge pattern. The price has been in this pattern for more than a month leading to this correction phase. Though this pattern usually provides a bullish opportunity with overhead resistance breakout, the sudden sell-off in the crypto market had other plans.

On January 5, the price finally breaches a confluence of crucial technical supports, i.e., $3634, support trendline, 0.382 Fibonacci retracement level, indicating the price will continue its correction rally.

The ETH price is still trying to sustain above the 200 MA, maintaining its overall bullishness. However, the crucial MAs(20, 50, and 100) could act as a valid resistance level.

The daily Relative Strength Index (32) shows a sharp dump to the bearish territory, displaying the selling pressure in the crypto market.

ETH Price Could Pullback To Retest The Descending Trendline

Source- Tradingview

The ETH coin price is currently trading at the $3397 mark, with an intraday loss of 4.02%. However, the price obtaining support from the daily-200 could retrace to retest its new resistance level of $3600 or the descending trendline. If the coin could sustain at this lower level the price should continue a downward rally.

The important horizontal resistance levels are $3600 and $3900. Moreover, the support levels are $3156 and $2766.

Ethereum Fear and Greed index 

-With ongoing sell-off on the crypto market, the Ethereum fear and greed index is now rated 25 out of 100, indicating a fear sentiment among the market participants.