Ether price analysis 10 Jan: will the $3,000 level hold?

Ether’s relief rally is likely to be sold into as ethereum awaits upgrades

A gold ether coin                                 
Ether balances across all exchanges have fallen – Photo: Shutterstock
                                

Ether continues to remain under a bear grip as it attempts to hold above the psychological support of $3,000. The latest fall happened even though several onchain indicators were pointing to accumulation by investors. 

Glassnode data shows that ether balances across all exchanges have continued to decline since August 2020. Another metric also indicated that ether addresses depositing ETH to exchanges have continued to drop in the past 30 days though ether prices have fallen during that period.

Analysts at JPMorgan believe that ethereum’s competitors will continue to gain ground as ethereum awaits critical upgrades expected to happen in 2022. 

“In our mind, this optimistic view about ethereum’s dominance is at risk. This is because the scaling of the ethereum network, which is necessary for the ethereum network to maintain its dominance, might arrive too late,” the analysts said, Markets Insider reported.

In a recent Bankless podcast, Ethereum co-founder Vitalik Buterin said the two important upgrades are the merge, which is the transition from proof-of-work to proof-of-stake, and the surge, which aims to increase scalability, bandwidth and throughput to the network. 

Although analysts believe competitors will play catch-up, could Ethereum manage to maintain its lead? Could ether go up? Read the ETH price analysis to find out.

Ether price technical analysis: weekly chart

Ether weekly chart
Ether weekly chart – Source: Currency.com

ETH’s price broke below the 20-week exponential moving average (EMA) last week, which indicates that the bears have overpowered the bulls. The ETH/USD pair dropped 17.7% last week to end at $3,151.67.

The pair have declined to the 50-week simple moving average (SMA), which is now likely to act as a strong support.

If the price rebounds off the current level then the pair could rally to the 20-week EMA, which is likely to act as a resistance. Should the price turn down from this level, it will suggest that sentiment has turned negative and traders are selling on rallies.

The bears will then make one more attempt to sink the price below the 50-week SMA. If they succeed, the pair could start its downward march to $2,651.04 and then to $2,000.

Contrary to this assumption, if the price rebounds off the current level and breaks above the 20-week EMA, it will suggest that the correction may be over. The bulls will then attempt to resume the upward move.

Ether price technical analysis: daily chart

Ether daily chart
Ether daily chart – Source: Currency.com

ETH’s price has been trading inside a descending channel for the past few days. The failure of the bulls to push the pair above the resistance line of the channel on 4 January may have attracted profit-booking from short-term traders.

That started a sharp correction which pulled the pair below the strong support zone at $3,641.36 to $3,500.94 and the relative strength index (RSI) into the oversold zone.

The buyers are currently attempting to defend the support line of the descending channel. However, the relief rally is likely to face strong selling at the 20-day EMA. The bears will then attempt to sink the pair below the channel, which could intensify selling.

The bulls will have to push and sustain the price above the resistance line of the channel to signal a possible change in trend.

Ether: buy or sell this week?

Ether’s price analysis shows that the trend remains down but the oversold condition on the RSI points to a possible relief rally in the short term. If bulls push the price above the channel, it will suggest that the downtrend could be over. Alternatively, a weak rebound off the current level will increase the possibility of a further decline to $2,651.04.

The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial adviser before arriving at a decision.

Ethereum to US Dollar
Daily change
3229.16
Low: 3191.86
High: 3361.03

Further reading

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