The year 2024 began with a significant upswing for Ethereum (ETH/USD), reaching heights not seen since May 2022, but it has experienced a downturn since January 12. Currently, ETH is trading within a minor horizontal support zone that has been established for over a month. Uncertainty prevails as analysts provide conflicting forecasts about its future direction.
Ethereum's Struggle to Sustain Support
Since July 2023, ETH has shown an upward trend, with a notable bounce on an ascending support line in October, accelerating its growth. A breakout from a horizontal support/resistance area was observed in November, peaking at $2,717 on January 11, 2024. However, since then, the price has shown signs of decline.
The weekly Relative Strength Index (RSI), a tool to assess whether an asset is overbought or oversold, currently suggests a bearish reading, signaling a potential trend reversal.
Analysts Divided on Ethereum's Future
Analyst opinions are mixed. InmortalCrypto predicts a short-term decline followed by a significant increase, whereas CryptoMichNL suggests a potential appreciation of ETH against Bitcoin, spurred by Bitcoin's bottoming out and enthusiasm for Ethereum spot ETFs, along with Ethereum's new updates promising a 90% reduction in costs. Contrarily, CredibleCrypto predicts that the ETH/BTC pair will continue to decline.
ETH Faces a Critical Support Test
On the daily chart, the outlook appears bearish, with ETH breaking an ascending support trend line in place for 95 days. This break has been corroborated by a daily RSI falling below 50. Currently, ETH is in a horizontal support area at $2,200. Should this zone give way, we might see a descent to the Fibonacci support level at $1,980, a drop of nearly 11%.
However, a strong bounce in the $2,200 support area could trigger a rise up to the ascending support trend line at $2,400, a potential increase of 7%.
Conclusion: Investing in ETH Now?
The decision to invest in Ethereum near the $2,000 mark depends on various factors. Investors must consider not only technical analyses and expert opinions but also their risk profile and investment objectives. While some may see the current volatility as an opportunity, others may find it too risky. In this volatile context, staying informed and carefully weighing each move in the cryptocurrency market is essential.
