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Ethereum faces $3K retrace if pullback extends

Ethereum faces $3K retrace if pullback extends

GrafaGrafa2024/12/23 06:00
By:Isaac Francis

Ethereum's (CRYPTO:ETH) price is under pressure as it struggles to maintain stability above $4,000, according to crypto analyst Rekt Capital.

Over the past 30 days, Ether has briefly crossed the $4,000 mark, peaking at $4,077 on Dec. 6, but failed to sustain gains, as per CoinMarketCap data.

Rekt Capital highlighted $3,000 as a critical psychological support level for Ethereum, which was last tested on Nov. 9.

Ether has hovered above this level since early August but risks further decline.

Currently trading at $3,466, Ethereum could dip by over 10% in the near term, potentially retesting the $3,000 support zone.

Ethereum continues to struggle with the psychological resistance of $4000,” said Rekt Capital in a Dec. 20 market analysis.

The analyst also noted that a pullback to $3,000 might form a potential inverse head-and-shoulders pattern, signaling a possible trend reversal if a bottom develops around that region.

Contributing to the current market sentiment are factors such as dwindling Ethereum reserves on exchanges and the growing momentum of spot Ether exchange-traded funds (ETFs).

On Dec. 17, data from CryptoQuant revealed that ETH balances on exchanges have dropped to an 8.5-year low of 9.2 million, reflecting a nearly 10% decrease over the past year.

Meanwhile, inflows into spot Ether ETFs have gained traction.

Since their launch in the United States on July 23, these ETFs have accumulated approximately $2.43 billion, according to Farside data.

Analysts remain optimistic that the trend will continue, especially if regulators allow staking yields.

VanEck, an asset management firm, has projected Ethereum's spot price could reach $6,000 by late 2025.

However, with Ethereum currently facing resistance and weak initial ETF inflows, surpassing its all-time high or reaching $5,000 by year-end remains unlikely.

At the time of reporting, the Ethereum (ETH) price was $3,323.59.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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