All of the top 30 cryptos are flashing red following Monday’s market-wide correction that has left many market participants asking whether we are officially in a bear market. Ethereum price has tanked below the crucial $4,000 level yet again after losing as much as 11% on December 13.
ETH is down 5.42% on the day and currently teeters around $3,783.
Ethereum Price Faces Stiff Resistance Upwards
Ethereum price has formed a falling pennant on the daily chart as its upward movement is hindered by several hurdles. At the moment, ETH is fighting immediate resistance from the 100-day Simple Moving Average (SMA) at $3,909. Even if Ethereum bulls manage to push the smart contracts giant token beyond this level, it will meet resistance from the pennant’s resistance line currently around $4,200.
A break out above the pennant will be met by significant resistance from the 50-day SMA around $4,345.
ETH/USD Daily Chart
Moreover, on-chain metrics from IntoTheBlock’s In/Out of the Money Around Price (IOMAP) model validate Ethereum’s stiff upward journey. The IOMAP chart shows that faces stiff resistance upwards and that the immediate resistance embraced by the 100-day SMA around $3,900 is within the $3,892 and $4,006 price range where approximately 1.31 million addresses previously bought roughly 3.04 million ETH. These investors might what to break-even curtailing any attempts to push Ethereum price above this point.
Ethereum IOMAP Chart
Therefore, the Ethereum IOMAP chart suggests that the path with the least resistance for Ethereum price is downwards.
Thus, a drop below the immediate support around $3,700 embraced by the pennant’s support line will add wood to the current bearish fire which could lead to a deeper correction towards the $3,500 psychological level.
The down-sloping moving averages and the downward movement of the Relative Strength Index (RSI) since November 08 add credence to Ethereum pessimistic outlook.
Moreover, the decreasing daily trading volume and downward movement of the Moving Average Convergence Divergence (MACD) indicator below the zero line in the negative region validates ETH’s bearish thesis.
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