3 Reasons Why Ethereum Price Could Crash: How Low Can ETH Go?

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As a seasoned researcher with over a decade of experience in the crypto market, I have witnessed countless bull runs and bear markets. The current downturn in Ethereum (ETH) price serves as yet another reminder of the volatile nature of this space.

The cost of Ethereum (ETH) is decreasing, following a similar trend in the broader cryptocurrency market. This decline occurs as Bitcoin (BTC) falls below $100K once more. As noted in an earlier post, indicators suggesting the sale of ETH have been suggesting this drop for the past week. Given that ETH has dropped 5% from its peak on Friday, how far might the ETH price fall?

Three Reasons That Suggest ETH Price Will Drop

Since November 11, Ethereum’s price has consistently reached new highs; however, during the same period, the Relative Strength Index (RSI) has been recording lower highs instead. This discrepancy between the price trend and the RSI pattern is a prominent warning sign, suggesting that Ethereum might experience a decline in value.

As an analyst, I’ve noticed that one of the key factors contributing to my perspective is the slowing pace indicated by the Awesome Oscillator (AO). Since November 11, this momentum indicator has predominantly remained above the zero line, save for a few short-lived dips. However, with the bearish divergence and Bitcoin experiencing a downward trend, I suspect a surge in selling pressure might be imminent.

A third possibility is that ETH has marked the $4,000 psychological level, which often triggers a retest of significant levels and results in corrections and profit-taking. Given this trend, it’s plausible that further corrections and an extended decline may occur soon.

Ethereum Technical Analysis: How Much Can ETH Crash?

Given that Ethereum’s value increased for 25 consecutive days while both the Relative Strength Index (RSI) and Awesome Oscillator (AO) were decreasing, this could have been a significant indication of an impending exhaustion. The 5% drop since Friday’s peak implies that investors are cashing out their profits. Therefore, addressing the question “Will ETH go lower?”, it appears likely that the Ethereum price will continue its downward trend until it encounters a robust support system to rebound from, or until it finds an area where demand is high enough to stabilize it.

An interesting aspect to consider is a potential jump in price from around $3,800 to $3,900, which serves as a demand zone that might draw in buyers. A solid rejection at approximately $4,024 could trigger a 9% drop in ETH’s value to around $3,701, which is the initial significant support level. If selling pressure persists beyond this point, Ethereum may continue to fall and retest its previous monthly Value Area High (VAH) or the weekly Volume-Weighted Average Price (VWAP), located at approximately $3,518.

Based on current Ethereum price predictions, a drop below $3,518 may mark a significant turning point and potentially lead to a decline ranging from 4% to 10%, taking the price down to approximately $3,368 or even as low as $3,161.

If Ethereum’s price rebounds from the $3,800 to $3,900 resistance zone and reaches a new peak above $4,087, it would contradict the bearish prediction and trigger a buy signal. This change could lead Ethereum to re-approach $4,500 and challenge the significant $5,000 mark.

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2024-12-09 17:30