After the market-wide adjustment on Monday, all of the top 30 cryptocurrencies flashed red, which made many market participants question whether we officially entered a bear market. Ethereum’s price fell below the critical $4,000 mark again after falling as much as 11% on December 13th. ETH fell 5.42% over the day and is currently hovering around $3,783.
Ethereum Price is Facing Very Strong Resistance
The price of Ethereum formed a falling pennant on the daily chart as its upward movement was hampered by several obstacles. Currently, ETH is struggling with the immediate resistance of the 100-day Simple Moving Average (SMA) at $3,909. Even if the Ethereum bulls manage to push the giant smart contract token above this level, it will encounter resistance from the pennant resistance line, which is currently around $4,200.
The break of the pennant will face major resistance near the 50-day moving average of $4,345.
ETH/USD Daily Chart. Source: TradingView
In addition, the on-chain indicators of the In/Out-of-the-Money-Around-Price (IOMAP) model from IntoTheBlock confirm the difficult rise of Ethereum. The IOMAP chart shows that it is facing strong resistance: the direct resistance contained in the 100-day SMA is around $3,900, within the price range of $3,892 and $4,006, of which about 1, 31 million addresses previously bought about 3.04 million ETH. How these investors could break even to reduce any attempts to push the price of Ethereum above that point.
Ethereum IOMAP Chart
Hence, the Ethereum IOMAP chart shows that the path with the least resistance to the Ethereum price is down.
Therefore, a break below the direct support level near the $3,700 contained in the pennant support line will fuel the current declining firepower, which could result in a deeper correction to the psychological level of $3,500.
The downward sloping moving average and downward movement of the Relative Strength Index (RSI) since Nov. 8th has added credibility to Ethereum’s pessimistic outlook.
In addition, the decline in daily trading volume and the downward movement of the Moving Average Convergence Divergence (MACD) indicator below zero in the negative zone confirmed ETH’s bearish argument.