🔻 Potential Risk Analysis of Ethereum Price Drop and Future Trend Forecast 🔻
In the past three days, the price of Ethereum (ETH) has fallen by 5%, and the market has begun to pay attention to whether there will be a bigger crash. So, how much more can ETH fall? Next, we will analyze the three major factors that may lead to price declines and the downside space of ETH.
1️⃣ Divergence between price and RSI
Since November 11, although the price of Ethereum has continued to rise, the relative strength index (RSI) has failed to rise synchronously. This "divergence" is usually a precursor to a sell signal in the market, which means that the price of ETH may face a correction soon.
2️⃣ Declining momentum
According to the analysis of the momentum oscillator (AO), since November 11, the momentum has been above the zero line for most of the time, but it has begun to show a downward trend in recent days. At the same time, the pullback of Bitcoin may also increase the selling pressure in the market, causing pressure on the price of ETH.
3️⃣ Psychological barrier breakthrough
Ethereum price has pulled back after breaking through the psychological barrier of $4,000. Usually when the price reaches such a key area, it either pulls back or takes profits. Therefore, ETH may face further price adjustments.
ETH Technical Analysis: How much room is there to go down?
Despite the continuous rise in ETH price over the past 25 days, the decline in RSI and AO warns that the market may be weakening. ETH has fallen 5% since last Friday, and this may just be the beginning.
Short-term rebound: ETH may rebound around $3,800 and try to break through $3,900. If this resistance level is broken, a larger rebound may be seen. Key support: If the price fails to break through $3,900, ETH may pull back to the key support level of $3,701. Further downside: If the selling pressure remains large, ETH may drop to $3,518, which is the previous monthly high and volume-weighted average price area. Extreme downside: If ETH falls below $3,518, the price may further drop to $3,368 or $3,161.
Tests in the bull market: mentality and rationality
The bull market not only tests the ups and downs of the market, but also tests the mentality of investors. In the face of account fluctuations, rational judgment is particularly important. Even if the market faces adjustments, maintaining a calm investment strategy is a sound choice.
