The price of Ethereum may continue to fluctuate between two important psychological levels in the short term, as it struggles to maintain above the $4,000 level, according to an electronic analyst.
"Ethereum is still struggling to break through the psychological resistance level of $4,000," anonymous analyst Rekt Capital said in a market report on December 20. Over the past 30 days, Ether has crossed the $4,000 threshold several times, reaching a peak of $4,077 on December 6, but has been unable to sustain this price level, according to data from CoinMarketCap.
Rekt said the $3,000 level has now become a "psychological support level" for Ethereum, a price level that Ether last touched on November 9. Prior to that, Ethereum had traded below $3,000 since August 3.
Rekt predicts that Ethereum may consolidate in the range of $3,000 to $4,000 in the near future. However, he also noted that ETH prices could drop more than 10% to the $3,000 region in the short term, as it trades at $3,347 at the time of writing.
Rekt said: "It would be noteworthy if ETH can form a bottom around this area, as that could lead to the development of a right shoulder in an inverse head and shoulders pattern."
The inverse head and shoulders pattern is a reversal pattern, often signaling a change in price trend. Analysts also point to other factors such as declining Ethereum supply on exchanges and increasing capital inflows into Ether ETFs as potential catalysts for a strong price momentum.
On December 17, Bitcoin Magazine reported that data from on-chain analysis firm CryptoQuant shows Ethereum exchange reserves have dropped to an 8.5-year low of 9.2 million ETH, down nearly 10% year-over-year.
Meanwhile, some analysts are optimistic that inflows into Ether ETFs are increasing and may surpass Bitcoin ETFs by 2025.
Since its launch in the US on July 23, the Ether ETF has attracted a total of around $2.43 billion, according to data from Farside.
Analysts predict this growth trend will continue in 2025, especially if regulators allow these funds to generate yield from staking.
VanEck Asset Management estimates the spot price of Ethereum will reach $6,000 in Q4 2025.
When the Ether ETF launched in July, the cryptocurrency market expected Ether to perform similarly to Bitcoin after the Bitcoin ETF launch in January. However, the weaker-than-expected initial inflows have made it less likely for Ether to surpass its ATH and reach $5,000 by the end of the year.
Disclaimer: This article is for informational purposes only and is not investment advice. Investors should do their own research before making any decisions. We are not responsible for your investment decisions.
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According to Cointelegraph
