In addition, this price area is in confluence with the 200-day exponential moving average (EMA), which increases its technical relevance for both short and long-term price predictions.
At first, we got an instant rejection on December 4 ahead of the FOMC meeting. However, the price bounced back on Tuesday and broke through the $3,250 resistance. However, we can see some early signs of rejection in the form of big upper wicks.
The selling pressure seems to have accelerated as ETH hit $3,400 on Wednesday, right after Powell’s speech. Today’s liquidations confirm that the market is dumping the token as it hits this critical mark.
The Relative Strength Index (RSI) is also at a critical juncture, as it stands at 52. If the rally continues, we could get a move toward $4,000 in the next few weeks, and possibly before the year ends, as a bullish structure would be confirmed.
Nonetheless, if a rejection is confirmed in lower time frames, we could see ETH retreating to $2,800 shortly.
Early Bounce in Hourly Chart Favors a Bullish Outlook for Ethereum
Heading to a lower time frame, we can see that the same fractal repeats on the hourly chart. The price has come back down to retest the market’s bullish structure by tagging the uptrend’s previous high.