Ethereum is facing a critical moment as Bitcoin’s price drops below $93,000, adding to the uncertainty in the broader market. The second-largest cryptocurrency by market cap finds itself testing key support levels while data suggests institutional investors are reducing their exposure via ETF inflows.
Ethereum Technical Framework The current market structure features a compressing triangle pattern on the 4-hour time frame, indicating that Ethereum is preparing for a big move ahead.
This pattern, which features converging trend lines, usually precedes a decisive break in either direction. It can be likened to a spring being compressed; the longer the compression lasts, the stronger the move that follows.
Technical indicators paint a complex picture of Ethereum’s near-term outlook. A bearish crossover between the 100-EMA and 200-EMA adds additional resistance above prices, while the Relative Strength Index (RSI) struggles to stay above the middle point to weak momentum.
This situation was exacerbated by $55.41 million in outflows from ETFs, with Fidelity accounting for $20.41 million of this withdrawal.
Critical Levels and Ethereum’s Future Looking ahead, the $3,400 level is a critical battle point. If Ethereum successfully defends this support, it could push prices towards the supply zone at $3,568. Conversely, failure of the support could lead to a pullback towards $3,244.
Ethereum’s direction into the new year will depend on how this triangle pattern resolves, along with institutional investor flows and the overall market sentiment.
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