The price of Ethereum is likely to continue fluctuating between two important psychological levels in the short term, as it struggles to maintain above $4,000, according to an electronic analyst.
'Ethereum is still struggling against the psychological resistance level of $4,000,' anonymous analyst Rekt Capital noted in the market report on December 20. Over the past 30 days, Ether has repeatedly surpassed the $4,000 threshold, peaking at $4,077 on December 6, but has been unable to sustain this price level, according to data from CoinMarketCap.
ETH could accumulate between two psychological levels.
Rekt stated that the $3,000 level has now become a 'psychological support' for Ethereum, a price that Ether last reached on November 9. Prior to that, Ethereum had traded below $3,000 since August 3.
The price level of $3,000 has become a 'psychological support' for Ether | Source: Rekt Capital
Rekt predicts that Ethereum could accumulate in the range of $3,000 to $4,000 in the near future. However, he also noted that the price of ETH could drop more than 10% to around $3,000 in the short term, trading at $3,347 at the time of writing.
Rekt commented: 'It would be notable if ETH could form a bottom around this area, as it could lead to the development of a right shoulder in the inverse head and shoulders pattern.'
The inverse head and shoulders pattern is a reversal pattern that typically signals a change in price trend. Analysts also point out other factors such as the decreasing supply of Ethereum on exchanges and the increasing capital inflow into spot Ether ETFs as potential catalysts for strong price momentum.
On December 17, Bitcoin Magazine reported that data from on-chain analytics company CryptoQuant showed that the amount of ETH on exchanges had fallen to its lowest level in 8.5 years, down to only 9.2 million ETH, a decrease of nearly 10% compared to the previous year.
Meanwhile, some analysts are optimistic that the capital inflow into the spot Ether ETF is increasing and could surpass the Bitcoin ETF by 2025.
The growth trend of the Ether ETF is expected to continue.
Since its launch in the United States on July 23, the spot Ether ETF has attracted a total of approximately $2.43 billion, according to data from Farside.
Analysts predict that this growth trend will continue into 2025, especially if regulators allow these funds to profit from staking.
Asset manager VanEck estimates that the spot price of Ethereum will reach $6,000 in Q4 2025.
When the spot Ether ETF was launched in July, the cryptocurrency market expected that Ether would perform similarly to Bitcoin after the spot Bitcoin ETF launched in January. However, the initial capital inflow was weaker than expected, making it less likely for Ether to surpass its all-time high and reach $5,000 by the end of the year.
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