Ethereum has fallen below the $ 4000 mark and has tested the $ 3800 level as resistance over the past few days. The $ 3,620 mark has already been tested twice. Bitcoin Dominance fell from 39.94% to 40.22% in the hours leading up to press time. Buyers were not in a strong position at these levels for Ethereum. Well, the interesting question is, will the birth of the New Year see ETH heading south because Bitcoin couldn’t get past $ 48.5k? Or will it show another bounce and more chops?
ETH- 1H
The yellow levels represent Fibonacci retracement levels for a larger ETH move, marking them as significant levels on lower timeframes. In the past week, we saw ETH respect the $4121 resistance level, get rejected, and find some support at $3585 and $3620 which were near the $3660 retracement level.
The $ 3,800 has been an area of demand in the past and it was not an encouraging sign for the bulls to see this area move from demand to supply.
At the time of writing, the price was above the 23.6% retracement level for ETH’s drop from $4150 to $3585. This suggested that we could see another bounce toward $3800.
One thing to keep in mind is that the weekend has arrived, with a big party. This creates conditions of low liquidity where prices could be moved back and forth significantly. The liquidation of December 4 comes to mind.
Reasoning
Price has rebounded between the $ 3,600 and $ 3,800 levels over the past two days. The RSI was also neutral at 50, showing that the momentum over the hour period was not favoring bears or bulls.
The OBV appeared to have found a temporary bottom (green) recently but crashed right through on the rejection at $3800. This indicated that buyers were still fearful while sellers were dominant.
Conclusion
On the one-hour chart, Ethereum did not present a healthy outlook for the bulls. It could also be a bit too late to turn bearish as weekends sometimes see promising price rebounds that fade out later on Monday. A short position at $ 3,800 or $ 4,000 may be considered if prices reach there on the weekend. Otherwise, it would probably be better to wait to enter new positions.
