Ethereum Analysis – December 23, 2024Hello, this is Greedy All-Day.
Today's analysis is on Ethereum.
Weekly Chart Overview:
Let’s start by looking at the weekly chart.
The orange box, where Ethereum is currently facing resistance, has served as a resistance zone three times recently. Numerically, the last resistance saw a slight higher high, but it wasn’t a clear breakout, leading to a corrective decline.
At its current position, Ethereum continues to face resistance at the highs of 2024. Alongside the Ichimoku Cloud entry and a retest of the weekly 20 EMA, the Lagging Span is also crossing through the candles. This indicates a potential for further downside.
Historical data suggests that if Ethereum breaks above the orange box resistance at 4110, we could see an approximate 20% increase, with a breakout above 4877 potentially leading to new all-time highs.
Zoomed-in Weekly Chart:
Looking closer, the recent rebound occurred around 2112. The critical support zone is at 2067, which corresponds to the lower wick of the green box candle from the previous frame. Holding above this support is crucial.
If Ethereum drops from its current resistance zone to the 2112–2067 range, it may form a large double-top pattern. This could significantly strengthen selling pressure in the market.
In such a scenario, Ethereum may fall to the lower boundary of the next frame at 1492, a level that could mark the beginning of a prolonged bearish trend.
Daily Chart Overview:
On the daily chart, Ethereum is currently finding support near the Ichimoku Cloud. However, it has yet to enter the cloud. If it does, the next support zone would be around 3016, a level that served as support for approximately 10 days within the yellow box.
If 3016 fails as support, Ethereum is likely to retest the upward trendline. Should the trendline break to the downside, holders of long positions may need to reduce their exposure. This is because, even if the double-top pattern holds as support, we could still see up to an additional 20% correction.
Conclusion:
Based on the current chart, Ethereum is not a recommended buy at this time.
For aggressive buyers, entering after a breakout above 4110 is advisable. This is due to the historical resistance at this level, which has been tested three times. A breakout above 4110 could lead to a 20% move or more, with the potential for Ethereum to reach uncharted territory.
On the other hand, buying now simply because prices have dropped significantly is risky, given the possibility of a large double-top pattern and weakening buying pressure. It’s best to avoid buying at the current levels.
For sellers, key signals to watch for are:
Entry into the Ichimoku Cloud.
Failure to hold support at 3016.
A break below the upward trendline.
Failure to hold the 2112–2067 support zone.
