ETH/USD has fallen rather hard in the past day after failing to penetrate resistance levels above; now an important support level is being tested.
As of this writing, ETH/USD is trading near the 3930.00 vicinity and this has occurred after Ethereum wasn’t able to penetrate resistance levels near 4140.00 yesterday. ETH/USD had produced a polite incremental climb the past week of trading. On the 20th of December ETH/USD was trading near the 3750.00 level. The broad cryptocurrency market also fell yesterday and the correlation of the major digital assets and their declines should be acknowledged.
Bullish speculators may see the past day of trading as a mere profit taking move by speculators within cryptocurrencies. While skeptics may be inclined to look at yesterday’s results as proof the past week of trading was a ‘false rally’ and that the bearish trend of ETH/USD and its major counterparts will continue. ETH/USD is still trading politely above its price level from a week ago; current support near the 3890.00 mark should be monitored.
If ETH/USD is able to sustain its prices above the 3925.00 mark near term, this may be an indication Ethereum is showing the ability to consolidate and create another push higher. The 4000.00 juncture could prove to be an important psychological level for ETH/USD. Bullish traders may perceive this price as a healthy sign for Ethereum that keeps it firmly within a stance which can produce additional rocket rides higher towards loftier values.
However, if ETH/USD were to stumble again during this holiday season and not produce a solid move upwards that can be sustained above the 3970.00 mark, this may be a sign that nervous sentiment remains in the cryptocurrency market. In early trading this morning, ETH/USD did fall to around the 3875.00 level. If lower support fails to hold short term, this could ignite more selling which could trigger a relatively fast decline. If somehow ETH/USD begins to test values from last week around the 3750.00 ratio this may be a signal additional bearish activity will arise.
Trading within ETH/USD is likely to remain volatile during the holiday season. If speculators believe yesterday’s selloff was a sign that further erosion may occur with Ethereum, they may be tempted to be sellers on slight moves higher to launch their short positions. ETH/USD may be about to show that its one-week climb higher has run out of power near term.
Ethereum Short-Term Outlook
Current Resistance: 3973.00
Current Support: 3890.00
High Target: 4140.00
Low Target: 3770.00
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