Ethereum (ETH) starts the year 2022 on a bad footing. He said goodbye to the $ 4000 which is becoming a major resistance. The current exit from the bottom of the bullish channel that held up the last bull run clearly reflects the bearish momentum since its ATH on November 10, close to $ 4,900. Considering the fact that the prince of cryptos is following the evolution of Bitcoin late, we still have some downside.
If in the medium to long term, the question of a bear market does not arise, the prospect of further consolidation towards the critical $ 3400 zone is starting to gain ground in the short term. Technical analyzes in weekly and daily units show a two-faced ETH trend. The Ichimoku indicator allows us to distinguish it at a glance.
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Negative signals are linked for Ethereum in weekly units. But no warning of a bear run.
The candle at the start of the week confirms at this stage, the drop in Ethereum prices below the lower limit of the bullish channel. It could complete the list of negative signals in weekly units.
First of all, there was the rebound failure below the Tenkan which was around $ 4100-4200. The most fragile curve of the Ichimoku has turned into an intermediate resistance. Secondly, the lower bound of the bullish channel rejected the latest attempts at a rebound to the point of breaking down the $ 4000 support which had been so much championed by buyers. Thirdly, the Chikou Span although it remains above ETH prices, has pressed this key and symbolic support.
When we see the Prince of Crypto prices between Tenkan and Kijun, we have to admit that there is no overheating on the sell side. The prospect of seeing them join support around $ 3,400 would not be surreal from the first weeks of 2022. And besides, the Kijun is close to this critical level.
Despite the accumulation of these negative signals, Ethereum is far from having crossed the red line of a potential bear run. The positioning of its prices and the Chikou Span compared to the Kumo do not inspire concern.
A bearish dynamic that is accentuated in the short term
Compared to last week’s analysis, the situation continues to deteriorate in daily units with Ethereum prices well below Kumo. In the same movement, the Chikou Span is on the way to limit even if it is currently playing by a hair.
It would be quite possible that intermediate support around $ 3600-3700 is at risk. Especially since the prince of cryptos stumbles on the Tenkan. Sellers are currently in a position of strength in the short term.
What if they managed to hammer home buyers by breaking down $ 3600-3700, we could start the debate on the critical zone of 3400 $ which corresponds to a level close to the weekly Kijun. Social networks and forums that tend to swear by the bullish, better watch what the latest signals from technical analysis offer. In daily units, we see that the bearish scenario is about to prevail.
In summary, Ethereum could sink to lower levels even if that does not detract from the excellent year 2021 which confirmed its domination against the king of cryptos.
Everything indicates that the $ 3,400 may only be a matter of time. It is moreover a personal intuition which engages only the writer of this analysis.
If the critical $ 3,400 zone were to be hit, however, there could be buyers showing up as the latter represents major support. Nonetheless, dreaming too openly of a rebound towards new ATHs should be outlawed. It suffices to analyze the main obstacles to be broken in daily units with the various Ichimoku curves and the downward trend line in orange.
Otherwise, sellers would be clever to push ETH prices towards $ 2,800. Which was an unimaginable scenario just a few weeks ago. It just goes to show that the financial markets, whatever the asset class, encourage us to remain humble.
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