As investors turn fearful in the falling crypto market, Ethereum nears a buy-the-dip level. With analysts targeting this pullback for a massive reversal potential, should you consider buying in a bleeding market?
Bitcoin BTC $112 380 24h volatility: 2.1% Market cap: $2.24 T Vol. 24h: $36.98 B breaking under the $94,000 mark, Ethereum ETH $4 631 24h volatility: 2.3% Market cap: $559.30 B Vol. 24h: $34.27 B is struggling to hold its bullish vote at $3,300. Currently, Ether is trading at a market price of $3,303 with a minor recovery of 0.44% in the past 4 hours.
Ethereum Price Analysis Shines Focus on $3,300
In the 4-hour chart, Ethereum price action reveals a bullish failure to sustain above the 61.80% Fibonacci level at $3,667. As the bullish failure resulted in a pullback, the broader market crash fueled the correction rally.
The Ethereum price is now down to $3,300 near the 23.60% Fibonacci level. While taking a lateral shift with multiple Doji’s along the way, the slowdown in bearish momentum is clearly evident in the Ethereum price trend.
As the biggest altcoin takes a lateral shift, the prevailing downfall has resulted in a death cross event. However, the 4-hour RSI line seeks a bullish opportunity as it highlights a divergence at play. Furthermore, it is starting to emerge from the oversold zone, signaling a potential trend reversal.
Analyst Finds an Extremely Bullish Pattern That Demands $2,900 Retest
Despite the strong chances of a pullback in Ethereum, Ali Martinez, an independent analyst, highlights this as an excellent buy-the-dip opportunity. In the 12-hour price chart of Ethereum, Ali highlights a potential inverted head-and-shoulder pattern.
A downswing to $2,900 will be very bullish for #Ethereum $ETH, as it creates an excellent buy-the-dip opportunity to target $7,000 next!
You don't even have to risk your own capital. Go to @SimpleFXcom via my link https://t.co/GLjkpQvfTT and claim the $5,000 bonus. pic.twitter.com/9lJp3XXFRa
— Ali (@ali_charts) January 9, 2025
The neckline of this extremely bullish pattern coincides with the $4,000 psychological mark. As the chances of a pullback in Ethereum grow, a downswing to $2,900 will increase the chances of a right-shoulder pattern. Based on the bullish pattern, the price chart highlights a potential price target of $7,000.
However, for momentum traders, the breakout of the $4,000 mark will provide a better opportunity at a lesser risk if the bullish pattern sustains.
Ethereum Derivatives and ETFs Turn Red
Despite the short-term chances of a bullish recovery, the Ethereum derivatives data analysis reveals a strong bearish influence. The Ethereum open interest is down to $29.69 billion, registering a 2.77% drop in 24 hours. Furthermore, the long-to-short ratio has reached 0.9467, reflecting a strong selling sentiment.
While the liquidations in the crypto market have reached $480 million, the Ethereum liquidations stand at $85.79 million in the past 24 hours. On a side note, as Bitcoin spot ETFs in the US record their second-largest outflow ever, the Ethereum spot ETF maintains a bearish approach.
On January 8, the Ethereum spot ETFs recorded an outflow of $159 million. Driving the bearish pack, Fidelity’s FETH ETF recorded an outflow of $147.68 million, while Grayscale Trust and Minitrust recorded an outflow of $11.66 million in total. The rest of the ETFs recorded a net zero outflow. And its second-largest outflow ever.
ETH Price Targets $3,500 Next Week
The short-term price trend in Ethereum suggests a potential recovery run to the 50% Fibonacci level at $3,446 based on the RSI divergence. However, the bullish failure to sustain the $3,300 mark amid the broad market crash could retest the $3,100.
Furthermore, the long-term price trend by Ali highlights the demand for a potential retest to the $2,900-$3,000 psychological mark for an inverted head-and-shoulder pattern.
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