ETH/USD Analysis – December 03, 2021

Daily Price Outlook

The ETH/USD was closed at $4512.71 after placing a high of $4630.11 and a low of $4437.49. ETH/USD extended its loss for the second consecutive session on Thursday amid the prevailing market sentiment.

The entire market sentiment turned negative after the SEC rejected the application of WisdomTree for a spot bitcoin ETF. Furthermore, the rising concerns about the Omicron variant, which had been driving up the prices of Bitcoin, also eased after the US President's remarks, and the cryptocurrencies started to fall.

On Thursday, US President Joe Biden announced that the resurgence of coronavirus cases in the country would be controlled by accelerating the pace of vaccine inoculations and offering booster jabs. He also said that there was no need to panic over the spread of the Omicron variant as the situation was under control. After the first case of the Omicron variant was reported in the country, the number of daily reported cases reached 90,000, and people started panicking. However, the positive comments from Biden in such a situation eased the concerns and added strength to the US dollar, which ultimately had a negative impact on ETH/USD as both have a negative correlation.

A study carried out by the University of Sydney and Macquarie University showed that ETH might potentially replace BTC as the leading inflation hedge. The study revealed that the widespread adoption of cryptocurrencies had gained the confidence of investors who are now seeing digital assets as a better hedge against inflation than gold. This study added to the positive momentum in ETH/USD and capped further losses in the second-largest cryptocurrency by market cap.

Meanwhile, the losses in ETH/USD could also be associated with profit-taking. The cryptocurrency has been rising continuously in the previous session amid the announcement of a new Ethereum scaling roadmap by its co-founder, Vitalik Buterin. He revealed a strategic roadmap to expand the available data space for rollups using the graph protocol. The roadmap's announcement triggered a bullish rally in ETH last week, which lasted for about four days, and then the cryptocurrency dropped.

ETH/USD Intraday Technical Levels

Support Resistance

4423.43 4616.05

4334.15 4719.39

4230.81 4808.67

Pivot Point: 4526.77

ETH/USD - Technical Outlook

The ETH/USD is trading with a slight bullish bias at 4,566 level. A close well above the $4,480 and $4,500 levels might signal the commencement of a new uptrend in the near future. In the scenario mentioned above, the price might jump to $4,650. Any further advances could push the price up to $4,800 in the short term. The downside correction may be extended if Ethereum struggles to start a new uptrend over $4,500. On the downside, the initial support level is near $4,420.

The first major support is presently emerging near $4,400. It is close to the 50% Fib retracement level of the upward run from the $4,282 swing low to the $4,506 high. A break just below the $4,400 support level might precipitate a precipitous drop. In this scenario, the price is likely to retest the $4,250 support level and the 100 hourly exponential moving average.