- Ethereum forms a bullish reversal pattern with key resistance and support levels.
- Sustained currency outflows suggest a possible reduction in supply and an increase in demand.
Ethereum (ETH) is currently trading at $3,433, seeing a 2% drop in the last 24 hours and trading volume down 18%. Over the past week, the asset fell 7% and on December 20 it fell below the $3,101 support zone, a level that had not been seen in over a month. The daily Relative Strength Index (RSI) stands at 44, indicating that Ethereum is approaching oversold conditions. This suggests the possibility of a short-term rally if buying interest returns.
ETH price chart, Source: Sanbase
The Ethereum price chart forms a descending right-angle widening formation, often interpreted as a bullish reversal pattern. This structure consists of two diverging lines: one acting as horizontal resistance and the other as downward-sloping bearish support. The pattern resembles an inverted ascending triangle, a setup that often leads to upward price movements once it breaks through resistance. The key levels to monitor are resistance at $3,713 (R1) and $4,159 (R2), with support at $3,136 (S1) and $2,953 (S2).
Meanwhile, Ethereum on-chain data reflects a significant reduction in exchange supply. Following last week’s record $1.2 billion net outflow, the largest exchange withdrawal in Ethereum history, another $35.93 million worth of ETH has been withdrawn from exchanges since the start of the week, according to Coinglass . This decrease in available ETH and sustained negative net exchange flows could result in a reduction in supply, as demand increases while availability decreases.
Funding Rates and Market Sentiment
Ethereum’s funding rate has moved into positive territory of 0.0089%, indicating that long-term traders are becoming more dominant. This suggests a shift in market sentiment towards optimism.
Currently, ETH is trading above the Ichimoku cloud, a technical indicator indicating strong support. However, if bearish forces regain control, Ethereum could see a drop towards $3,111, with a possible drop below $3,000 if selling pressure intensifies.
