Ethereum Drops 20% as ETHBTC Retests September and May 2021 Highs; Will ETH Float above $3.8k?
Ethereum might be a tad bit fragile, dumping 20 percent versus the greenback at spot rates.
Nonetheless, when analyzed broadly, the project is solid and anchored by desirable fundamentals.
Looking at DeFi and NFTs, where Ethereum is the home of both, general network activity coupled with the brand name continues to be the primary drivers of price.
Ethereum Market Performance and Price Status
Currently, ETH is trending above $3.9k–encouragingly above the critical support line at $3.8k.
Even so, ETHUSDT prices are within a bear breakout pattern, crashing below the multi-week support trend line clear in the daily chart.
Overall, the path of least resistance remains northwards from a top-down approach.
However, this depends on the reaction at $3.8k and how ETH bulls would slow down brutal bears of the past few days.
As it is from the daily chart, the alignment of ETH bears bars along the lower BB signal weakness—a precursor of even more losses.
If ETH buyers lose this level, the probability of ETHUSDT posting deep correction from recent peaks at around $4.9k would be elevated.
On the flip side, if ETH bulls build on the recent gains, rejecting lower lows and sustaining prices above $3.8k, the odds of an encouraging bounce back above $4k and later $4.5k would be high.
Meanwhile, ETH is ceding ground versus the BTC as per the performance in the ETHBTC daily chart.
After days of a stellar performance by ETH bulls, expanding versus the BTC, the bull trap of December 4 is dashing buyers’ hopes.
Still, the ETHBTC chart favors buyers since prices are moving inside an ascending channel.
Therefore, for ETH buyers to remain ahead of the pack, it must unwind recent losses versus Bitcoin to print higher above 0.09 BTC.
This will confirm the bullish breakout pattern of early December 2021.
Ethereum Chart Is Beautiful; ETH is a Better Store of Value
While ETHUSDT prices might be under pressure, sliding when writing, one observer says the ETH chart is beautiful.
Based on the development in the daily chart, the coin’s price is driven by the network’s utility. Accordingly, there are more upsides with ETH bulls likely to bounce back in a resumption of the primary trend.
The #Ethereum chart is beautiful. This is the price the last 12 months. Growing with a nice and healthy speed, aiming up and to the right. The charts looks a lot more flourishing than #Bitcoin. Ethereum is a network of networks. The utility is growing by the day. pic.twitter.com/mZ0uPFra2D
— Dr. Vekst (@vekstportef) December 10, 2021
Meanwhile, another influencer observes that ETH is outperforming BTC. In his view, the coin is a better store of value—a positive tag for ETH in the long term.
Bitcoin pumpers claim that #Bitcoin is a better store of value than #gold because it's price has risen more than gold's price. By that logic #Ethereum is a better store of value than Bitcoin. If Bitcoin is gold 2.0 then Ether is Bitcoin 2.0. Has Ether already disrupted Bitcoin?
— Peter Schiff (@PeterSchiff) December 6, 2021
It is forecasted that Ethereum’s emission rate will drop below one percent in years to come following the activation of EIP 1559. This inflation rate is lower than Bitcoin’s.
ETHBTC Retesting May and September Highs, will ETH Bulls Hold?
From the daily chart, ETHBTC prices are inside a rising channel—a bull flag. The pullback from December 2021 peaks also saw the coin retest May and September 2021 highs.
$ETHBTC Throwback to May highs pic.twitter.com/W8q1k2V48Y
— Cheds (@BigCheds) December 11, 2021
Coincidentally, this level also flashes with the primary support trend line—former resistance—completing the rest following the break above on December 4.
For the trend line to remain valid, ETH buyers must reject lower lows at spot rates.
A bounce towards 0.09 BTC might draw demand, reviving prices and confirming the bullish breakout of early December. If not, the recent upswing would result in a bear trap, canceling out buyers.
Charts courtesy of Trading View
Disclaimer: Opinions expressed are not investment advice. Do your research.