Ethereum Weekly Analysis

Last week we said: 

On long time frames, ETH’s bullish outlook remains very strong. Fearful sentiment, sound fundamentals, and bullish catalysts solidify this outlook for 2022. In the short term, ETH will move with BTC, but this could be the year we see ETH flip BTC to become the #1 market cap coin. 

ETH continues to move with BTC as the market continues its bearish slump. As BTC falls to the next support zone at $37k, it has dragged ETH down below $3k to the $2800 mark. 

In this article, we will look at ETH’s price indicators and fundamentals to identify support and resistance zones. 

Ethereum Price Analysis

After falling below our first green line (support zone) identified last week at $3k, ETH has slipped down to the next support zone, which was the price bottom for ETH’s dip last September. This support is at about $2675, which held and produced a slight bounce to ~2.8k where ETH trades now. 

RSI indicators show that ETH is oversold at this level, so it’s likely that we will see a bounce from here (at least temporarily). 

The moving averages on the daily chart look bearish with a death cross incoming. The 200 SMA acted as resistance this past week, as ETH failed to close above $3400. 

ETH is also oversold on the daily, but the stochastic indicates that the RSI may dip further before reversing. This indicates we could see one more big dump before a strong bounce. 

ETH has broken below the weekly 50 SMA, but could potentially find support here at the second green line. If not, next support is at $1900 and then the 100 SMA at $1700, followed by the 200 SMA at $1k. 

There is a glimmer of hope on the long-term charts. Here we can actually see some bullish divergence. The last time that ETH dipped to this level in the fall, the RSI only dipped to 50. At the same price, the RSI is lower at 35 – meaning we are more oversold at this level than last time around. This indicates a rising price floor and an upward price window for ETH. 

We can also see the stochastic has bottomed and is ready for a trend reversal on the weekly timeframe.

Ethereum Investor Sentiment

ETH is still not trading in “Extreme Fear” even after this dump. However, the worst of the dump may not be taken into account as this indicator is only updated once per day around 8pm EST. 

Ethereum Fundamental Analysis

ETH continues to burn despite market conditions. Over the past 7 days, over 90% of all ETH emissions have been burned as network transaction fees. In the past 24 hours, ETH has been deflationary, burning 113% of all emissions.

Conclusion

It’s a terrible market, and hodling is very difficult in these conditions. But usage of the ETH network continues to grow, and ETH is burned every day. With the merge coming in 2022 and a “triple halvening” coming into effect, the impact on ETH’s tokenomic cannot be overstated. Despite this, ETH continues to suffer and fall along with BTC. 

Support Zones are: 

  • $2600-2800 (local)
  • $1700-1900 (demand / weekly 100SMA)
  • $1k (weekly 200 SMA)

Resistance Zones are: 

  • $3k (psychological)
  • $3400 (daily 200 SMA)

Do your own research. Not investment advice. 

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