After being rejected from the $3,000 level, Ethereum (ETH) is trying to hold a key support zone and build a base around this area. Some analysts have suggested that the altcoin must reclaim the crucial resistance soon or risk potential drop to new multi-month lows.
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Ethereum Forms Head And Shoulder Pattern
Amid the broader market volatility, Ethereum has been attempting to hold the recently reclaimed $2,900 level as support to potentially challenge higher resistance levels in the coming days.
The cryptocurrency has been trading within the $2,800-$3,400 price range over the past month, hitting a high of $3,447 nearly two weeks ago. Since reaching the local high, ETH has struggled to hold the rangeโs high, falling to the lows again during last weekโs market correction.
Amid this performance, the King of Altcoins is currently registering its worst Q4 performance since 2019, with a negative performance of 28.76%. Moreover, it is also recording a red December so far, trading 1.3% below its monthly opening of $2,991.
Some analysts have warned that ETHโs pain may not be over, as it appears to be forming a pattern that could spell trouble for the cryptocurrency. In a Tuesday X post, Ali Martinez suggested that Ethereum started forming a head and shoulder pattern following the massive corrections that the send most cryptocurrencies to multi-month lows.
Per the chart, the altcoin formed the left shoulder between late November and early December after bouncing from the $2,780 support. Meanwhile, the patternโs head was formed during the mid-December rebound that led to the $3,400 local high.
Now, as price is rejected from the $3,000 area again, the cryptocurrency appears to be forming the right shoulder. This suggests that ETHโs price could drop to the $2,800 area to complete the patternโs formation.
Martinez noted that if the pattern is completed, it could lead to a 15% potential move toward $2,400, a level not seen since the start of the Q3 breakout.
ETH Price In Trouble?
Other market observers suggested Ethereum could be in trouble after being rejected from the $3,000 barrier again. Ted Pillows noted that the altcoin tried to reclaim this level but failed, closing Monday around the $2,948 area.
To the analyst, If ETH doesnโt reclaim this key barrier soon, it could likely drop towards the $2,700-$2,800 support zone. On the contrary, a daily close above this level would set the base for a rally toward the $3,300 level.
Similarly, Sjuul from AltCryptoGems affirmed that Ethereum โis a bit in trouble after that nasty bearish deviation on top of the range.โ He highlighted the altcoinโs rejection from the mid-December highs, which sent the price the lower zone of its one-month range.
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Based on this, the analyst suggested that investors could expect โthe same to happen on the lower band,โ which would see the price retest the $2,600-$2,700 area, and drop as low as $2,400, before bouncing toward the range highs again.
Nonetheless, Sjuul declared that โbulls need to establish a proper uptrend here because losing $2700 would be a negative sign.โ
As of this writing, Ethereum is trading at $2,933, a 2.53% decline in the daily timeframe.
Featured Image from Unsplash.com, Chart from TradingView.com
