What Could This Correction Mean For Ethereum Price In Q1 2024?

Ethereum price faces immense bottlenecks amid a sustained drop from its 2024 peak at $2,715 to slightly above $2,200. The sell-off impacting the performance of ETH over the last couple of weeks stems from the downturn that swiftly followed the approval of spot Bitcoin ETFs in the US.

While many altcoins and even Bitcoin crumbled under the weight of post-ETF approval blues, Ethereum price stood defiant, briefly basking in the warm glow of investor optimism. But even its flame couldn’t withstand the icy grip of the relentless market malaise.

Now, the king of smart contracts teeters precariously, its crown at risk of slipping below the $2,000 mark.

Is this a good time to buy Ethereum price dips?

The path of least resistance is majorly inclined downwards, reinforced by a vivid sell signal from the Moving Average Convergence Divergence (MACD) indicator.

According to the daily chart, most traders and speculators missed a negative Relative Strength Index (RSI) divergence from ETH price possibly due to optimism around the ETF.

With the RSI neutral but falling below 40, an immediate recovery could be a pipe dream. Therefore, it could be prudent for traders to be ready to dollar-cost average (DCA) while anticipating a rebound.

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Fibonacci levels reveal that the trend reversal might continue slightly below $2,000 but precisely at $1,980, as highlighted by the 0.618 retracement ratio.

For such an outcome, Ethereum price will have to flip the highly contested $2,200 level into a resistance as well as the 200 Exponential Moving Average (EMA) (purple) at $2,016.

Holding above $2,200, on the other hand, could usher in another bullish era, where bulls push for an upswing beyond the January peak of $2,715 and aim for highs above $3,000.

Several crypto analysts like @Gotzeuus agree with the short-term bearish outlook, suggesting that Ethereum price will dive to sweep the $2,067 low. If this level holds, a rebound could ensue.

The analyst warned on X that Ethereum and altcoins could take a beating from Bitcoin price action, implying that this might not be the time to “overexpose” the crypto portfolio to altcoins.

For now, the best advice could be to exercise patience and avoid rushed decisions. Letting the doldrums settle will provide a clear trajectory Ethereum will likely follow.

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