The native token of Ethereum, Ether, did reach an all-time high price of $4,867 in November, after which it took a heavy plunge of 20%. As of now, the price of the cryptocurrency holds at $4,000 as a key support level, where there are risks of further selloffs- which are emerging in the form of fundamental and technical indicators.
Ethereum Price Rising Wedge
Ethereum seems to have reached out of a rising wedge, which is simply a bearish reversal pattern that comes out when the price trends upward inside a range that is defined by two converging trendlines. To put it simply, when the price of the token reaches the apex point of the wedge, it ends up breaking below the lower trendline of the pattern- a move that several technical chartists usually see as a cue for more losses incoming. In doing so, the target for profit appears to be equal at length to the maximum height of the wedge when measured from its point of breakout.
The bearish thought in the market of Ethereum has also cropped up despite the ability of the cryptocurrency to bear with the massive selling pressures that are felt elsewhere in the cryptocurrency market in recent weeks. For instance, Bitcoin went down by 30% after almost a month of establishing its record high sum of $69,000 in early November, much higher than the decline of Ether in the same period itself. This has prompted several analysts to call this cryptocurrency a hedge against the price decline of Bitcoin.
But this, in no way, takes away the fact that the recent price rally of Ethereum does coincide with a decline in the weekly relative strength index- which signals a growing divergence between the price and the cropped up momentum in the cryptocurrency industry.