Ethereum Price Analysis: ETH Reverses Trend From Bullish To Bearish
Daily Ethereum ETH Price Forecast
- The relative strength index (RSI) has dipped back into the neutral zone.
- ETH 4-hour chart shows increasing bearish momentum.
After breaking past the $1,200 psychological level, the bulls ran out of steam as it neared the $1,300 zone. The smart contract leaders have gone through two bearish days, which has dipped the price to $1,120.
Ethereum Reverses Trend
Two notable things happened due to ETH's bearish price movement in the last two days. Firstly, the parabolic SAR has reversed from bullish to bearish, signifying that the overall market trend is negative.
Image: ETH/USD daily chart
The second thing to note is that the relative strength index (RSI) has dipped from the oversold territory to the neutral zone. This signifies the asset is no longer overpriced. As per IntoTheBlock, it looks like the bears have gained a tremendous advantage by flipping the $1,150 line from support to resistance.
Previously, at this level, 158,000 addresses had purchased around 6.7 million ether tokens. The 4-hour chart shows that the price is sitting on top of a significant level at the 50-bar SMA. Unfortunately, the MACD shows increasing bearish market momentum, so the sellers will probably flip this level soon.
Image: ETH/USD 4-hour chart
“Ethereum” Google Searches Hit All-Time High
According to Google Trends, the number of Google searches for “Ethereum” has reached an all-time high. Ethereum’s previous peak in search term popularity was on January 13, 2018 — the date of ETH’s all-time high of $1,432.88.
A surging Google Trends interest score for a cryptocurrency search term is usually associated with positive sentiment for that particular asset. The search interest on Ethereum is peaking during the asset's run-up to a new all-time high. However, one can’t say the same for Bitcoin. Searches for “Bitcoin” remains at just 65% of its peak popularity on December 23, 2017.
An increase in popularity for various cryptocurrency search terms could potentially spawn a self-perpetuating bull run as curious investors make purchases, fueling the price upward. This will spark more interest, resulting in a greater number of searches.
Google Trends also provides data corresponding to relative interest by region. Currently, the nations with the highest interest in “Ethereum” as a search term are Kosovo, North Macedonia, Slovenia, Nigeria, and China.
Ethereum Options Volume Breaks Record In December
December 2020 broke all previous month’s all-time high for Ethereum options trading volume, as per The Block report. While November generated $1.83 billion worth of options, December had $2.24 billion, a whopping 22.4% increase.
Image: The Block Crypto Data
Deribit exchange had 83.4% of the Ethereum options trading volume, followed by OKEx with 13.9% of the volume. bit.com is in third place with 1.72%. December held various all-time highs, including aggregate supply issue of stablecoins and legitimate volume on spot exchanges.
Key Price Levels To Watch For ETH
If our bearish thesis holds, then upon flipping the 50-bar SMA, the price will likely test the $1,040 level and then the 20-day SMA ($900). If all these levels break, then the next viable support wall lies at the 50-day SMA ($715).