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Ethereum (ETH) Price Declines After Yearly High – Will $2,000 Hold?

3 mins
Updated by Ryan James
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In Brief

  • The Ethereum (ETH) price broke out from a long-term horizontal resistance area and increased the last two weeks.
  • The weekly time frame Relative Strength Index (RSI) and price action both support the continuing of the increase.
  • Despite the bullish ETH price prediction, a close below $2,000 will invalidate the ongoing Ethereum price breakout.
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The Ethereum (ETH) price reached a new yearly high of $2,403 on December 9 but has fallen sharply since. 

The price is approaching a critical horizontal support area. Will it bounce or break down?

Ethereum Drops After Yearly High

The Ethereum (ETH) price has increased quickly since the start of October. It broke out from a descending resistance trend line on November 5, further accelerating its increase. After a brief rejection from a horizontal resistance area, the ETH price reached a new yearly high of $2,403 on December 9. 

ETH has fallen since and is decreasing sharply today. The price fell to a low of $2,145 before bouncing slightly. Due to the drop, Route 2 Fi noted that the last time ETH was this weak in relation to Bitcoin was in June 2022.

Ethereum (ETH) Price Movement
ETH/USD Daily Chart. Source: TradingView

With the RSI as a momentum indicator, traders can determine whether a market is overbought or oversold and decide whether to accumulate or sell an asset.

Bulls have an advantage if the RSI reading is above 50 and the trend is upward, but if the reading is below 50, the opposite is true. The RSI gives mixed readings. The indicator fell after generating a bearish divergence (green). However, it is still above 50. 

ETH Price Prediction: $2,000 or $3,000 First?

While the daily time frame offers a mixed reading, the weekly one is decisively bullish. The main reason is the breakout from the long-term $2,000 horizontal resistance area.

Except for a deviation (red circle) in April, the area had been in place since April 2022. Therefore, a breakout from it is expected to lead to a significant increase.

Cryptocurrency trader Daan Crypto believes that today’s decrease was caused by leveraged longs getting flushed out. He stated:

People were overleveraged and price was not moving up. It only takes a tiny push to make all these positions snowball and cause a squeeze like we just had.

Since open interest has reset, it is possible that the upward movement can continue.

Additionally, the weekly RSI supports the continuing of the increase. The indicator is above 50 and moving upwards. The next long-term resistance is at $3,500 in the weekly time frame. An ETH increase of 60% will be required for the price to reach it.

ETH Price Prediction
ETH/USD Weekly Chart. Source: TradingView

Despite this bullish ETH price prediction, a weekly close below $2,000 will invalidate the breakout. The ETH price will likely decrease by 30% to the next support at $1,500 in that case.

For BeInCrypto’s latest crypto market analysis, click here.

Top crypto platforms in the US | March 2024

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All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona School of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst. (I do not have a discord and will not contact you first there. Beware of scammers)
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