Ethereum (ETH) could drop below $3,500

 Ethereum (ETH) could drop below $3,500

  Although the larger community may not like it, the Ethereum (ETH) price prediction is bearish in the short term as it trades below the December downtrend line.  As the folks at Profit Revolution tell us, ETH's inability to reclaim the crucial $4,000 level is a suggestion that it may continue to decline and become more critical of its stance.  If Ethereum loses $3,500, the next major support will be $3,200.

  ETH price action has been quiet in the early days of 2022 and continues to mess with the psychological level of $4,000.  The Crypto Fear and Greed Index is located in the Extreme Fear area, recording a value of 23/100 at the time of writing this article.

  Indicator of greed and fear of cryptocurrency

  However, according to Ecoinmetrics, a blockchain resource analytics company, extreme fear phases rarely last long, which means they last for a minute around 30 days.

  Ethereum continues to garner support from various quarters indicating increased adoption and use of Ethereum as a Layer 1 protocol.  But, in the short term, can Ethereum (ETH) break away from the downtrend price action and rise above the December downtrend line to start a new rally?

  The descending triangle continues with the Ethereum scenes at $3,500

  The fact that ETH is not rising above the psychological level of $4,000 indicates that the bears are selling on every slight rally/high.  Ethereum's rebound from the $3,617 support area hit $3,577 to the $3,800 level, with the bears facing a severe challenge.  The 50-day Simple Moving Average (SMA) and the Relative Strength Index (RSI) are positioned at 41.45, indicating a bears advantage.

  ETH/USD daily chart

  A Movign Average Convergence Divergence (MACD) indicator below the zero line in negative territory and a decrease in volume is an indication that the bears have the upper hand.

  If the price continues to decline, the bears will once again attempt to bring the price of Ethereum below the support area.  If they manage to do so, the price could start a more subtle journey in search of the $3,200 support level.

  However, a bearish price prediction for ETH can be invalidated if the bulls push the price above the downtrend line and then above the moving averages.  If this happens, it will indicate that the corrective phase is over with a rally to $4,643 as the next logical step.

  At the moment, the price of Ethereum is $3,835

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