The digital asset market is turbulent, and on my trading screen, ETH's candlestick chart is telling a real story about greed and fear.
This morning, as I reviewed the Ethereum trend, I found that the price tested the psychological barrier of $3000 once again. This repetitive testing has lasted nearly a week, and the market is clearly trapped in a state of anxiety with no clear direction.
As an analyst who has been tracking the cryptocurrency market for many years, I can clearly feel that the current market is at a critical crossroads. Both bulls and bears are engaged in fierce battles here, and several upcoming key events are likely to determine the final direction before the end of the year.
01 The truth about price trends
Ethereum is currently oscillating around $2966, with short-term trends displaying a typical 'surviving in a narrow gap' characteristic. In the past few days, the price has fluctuated in the $2812-$2995 range, showing neither the courage to break through the upper resistance nor the determination to fall below the lower support.
This range-bound pattern reflects the current conflicting mentality of the market. On one hand, bulls firmly believe that Ethereum's long-term value is underestimated; on the other hand, bears point out the significant resistance on the technical side.
I noticed a key detail: on the 4-hour chart, the EMA trend indicator is in a clearly contracting phase. This means that market volatility is decreasing, which usually indicates that a new round of directional choice is about to come.
From a broader perspective, Ethereum's performance relative to Bitcoin remains weak. The ETH/BTC exchange rate has been on a downward trend since the 2022 MERGE upgrade, currently around 0.058, close to the critical level of EMA200 on the weekly chart. This relative weakness cannot be ignored.
02 Key technical level analysis
For traders, understanding key price levels is more important than blindly guessing directions. According to my analysis, the current market needs to focus on the following positions:
On the support side, the $2900-$2920 range is a short-term lifeline. Once it is breached, it may trigger a chain reaction; estimates suggest that if the price falls below $2900, approximately $630 million in long positions will face forced liquidation risk.
Further support is located in the $2850-$2880 range, as well as the psychological level of $2800. These positions will become the last line of defense for the bulls.
On the resistance side, the $3050-$3120 area becomes the first hurdle for upward movement. Stronger resistance lies in the $3175-$3200 range, where the hourly chart's downward trend line and the 100-hour moving average converge.
Only a strong recovery above $3280 (the 50-day exponential moving average) will allow Ethereum to reverse its current weak pattern.
03 The core factors influencing trends
Macroeconomic environment: challenges in policy and finance
Federal Reserve policy expectations have been erratic, becoming the core driver of Ethereum's fluctuations recently. Earlier, the market's optimistic expectations for interest rate cuts were shattered by the statement of 'moderate rate cuts', leading to Ethereum's decline from the high of $3030.
What is more concerning is the movement of institutional funds. Large institutions like BlackRock selling Ethereum have led to ETF fund outflows, causing a depletion of market buying power. Last week, Bitcoin spot ETFs saw a net outflow of approximately $158.3 million, and this weakness will inevitably affect the Ethereum market.
On-chain data: hidden positive signals
Despite the weak price trend, on-chain data shows some positive signs: more than 32.4 million ETH have been staked, and only 8.7% of the total ETH is held on centralized exchanges, hitting a multi-year low.
This means that the circulating supply is decreasing, which provides support for prices in the long run. At the same time, the continuous rise in the staking rate also indicates that long-term investors' confidence in the Ethereum network has not weakened.
Potential catalysts: upcoming major events
This week, the market will face two key events: on December 26, approximately $23 billion in Bitcoin options will expire, which may trigger severe volatility in the entire cryptocurrency market.
At the same time, the release of macroeconomic data such as the U.S. third-quarter GDP will affect the market's expectations for Federal Reserve policy, thereby influencing the trend of risk assets.
04 Bull-bear viewpoints clash and my personal interpretation
The current market shows a clear divide regarding Ethereum's prospects:
The bullish view holds that Ethereum is currently 'severely undervalued'. Some analysts predict that if the ETH/BTC exchange rate returns to historical averages, the price of Ethereum could reach $12000 or even higher.
On the technical side, the MACD indicator shows bullish divergence or signals a golden cross is about to occur, suggesting that the downward momentum may be weakening. Additionally, the market fear and greed index is in the 'extreme fear' zone (value of 25), which may indicate a rebound from a contrarian investment perspective.
The bearish view points out that Ethereum faces structural challenges. While Layer-2 solutions have improved network performance, they have also diverted transaction volume from the mainnet, reducing fee income.
In the past 30 days, ETH has even regained inflation, with an inflation rate of 0.275%, adding 27,000 ETH. This contradicts the deflationary expectations after the Merge upgrade.
My personal view is that in the short term, Ethereum is more likely to maintain a range-bound bottoming pattern. The market needs time to digest the current uncertainties, but I still have a positive outlook on Ethereum's fundamentals in the medium to long term.
The real turning point may occur when Ethereum re-establishes itself above $3300, which would confirm the recovery of the upward trend.
In the coming days, I will focus on whether Ethereum can hold the support area of $2900-$2920. If it stabilizes here and breaks through the resistance zone of $3050-$3120 with volume, it may attract more buying interest, pushing the price towards the target range of $3300-$3600.
On the other hand, if it breaks below the critical support of $2900, the market may test the $2800 level or even lower. At that time, the liquidation of those high-leverage long positions will fuel the bears, accelerating the downward process.
The sky outside is brightening, and a new day's trading is about to begin. The chart in front of me seems like a mirror, reflecting the greed and fear of market participants. At this critical moment, patience is more precious than courage; waiting for the market to find its direction is often wiser than blindly predicting.
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