FX.co ★ Technical Analysis of ETH/USD for December 18, 2023

Ethereum At Crossroads, Key Demand Zone Tested

Key Highlights: Ethereum's Market Outlook

• Peter Brandt's Pessimistic Forecast: Renowned trader Peter Brandt predicts a bleak future for Ethereum. He questions its viability as a long-term digital currency, citing its inferiority as a store of value compared to Bitcoin and concerns over functionality and high transaction fees.
• Diverse Expert Opinions: Despite Brandt's skepticism, other experts remain optimistic about Ethereum. They emphasize Ethereum's pivotal role in developing influential layer-2 protocols and compare its adaptability and versatility to Android in the crypto ecosystem.
• Current Market Dynamics: Ethereum is currently testing a significant demand zone, marking a crucial period for traders. While its price has seen a slight decrease recently, Ethereum's foundational role in various blockchain applications keeps it at the forefront of the industry's evolution.

Ethereum, the second-largest cryptocurrency by market capitalization, finds itself at a pivotal moment. As of December 18, 2023, Ethereum is trading at $2,269.34, a modest decline from its previous values. This article explores Ethereum's current standing and the diverse expert opinions shaping its perception in the forex market.

Ethereum's Price Dynamics and Expert Views

Peter Brandt's Skepticism:

Legendary trader Peter Brandt has voiced strong skepticism about Ethereum's future. Brandt doubts Ethereum's potential to remain a significant digital currency over the next decade. His concerns center around Ethereum's perceived shortcomings as a store of value, especially compared to Bitcoin. He also highlights issues like high transaction fees and functionality problems, going as far as to label Ethereum a "piece of junk."

Contrasting Views:

In contrast, other experts see a brighter horizon for Ethereum. They point to its role in pioneering innovative layer-2 protocols like Arbitrum (ARB) and Optimism (OP). Analyst Raoul Pal even compares Ethereum to Android in the crypto ecosystem, suggesting a versatile and adaptable future.

Technical Analysis: Ethereum's Market Position

Ethereum currently tests a key demand zone, a critical juncture for traders and investors, located between $2,137 and $2,125. A break below this zone could lead to further declines towards $2,109 and $2,073. Resistance lies at $2,204. The market's position below the short-term trend line suggests bearish control.

Technical Indicators and Momentum

The H4 chart's momentum indicator has touched the 30 level, signaling an extremely oversold market. Despite strong bearish pressure, there's potential for a pull-back. This observation is crucial for traders considering entry or exit points.

Weekly Pivot Points

Pivot Points are essential in identifying potential market turns and support or resistance levels. Current levels are:

• WR3: $2,911
• WR2: $2,553
• WR1: $2,349
• Weekly Pivot: $2,196
• WS1: $1,992
• WS2: $1,838
• WS3: $1,481

Long-Term Trading Outlook

Ethereum has shown an upward trend since reaching a low at $1,520. The long-term support at $1,368 is key; staying above this keeps the outlook bullish. The mid-term support at $1,913 is also critical – a sustained break below it could shift the long-term view to bearish.

Intraday Indicator Insights

• 13 of 23 technical indicators suggest a Buy, 4 indicate Sell, and 6 are Neutral.
• 15 of 18 moving averages signal Buy, while 3 point to Sell.

Market Sentiment Overview

The general market sentiment is predominantly bullish (77% bullish vs. 23% bearish). This trend aligns with the sentiment over the past week (80% bullish) and the last three days (74% bullish).

Strategic Trading Insights

Given Ethereum's current market position, traders should:

• Watch the key demand zone closely for potential breaks.
• Utilize pivot points for identifying reversal opportunities.
• Consider the bullish sentiment but remain cautious of potential shifts.

Useful Links

• More Artcles
• InstaForex Course for Beginners
• Open Trading Account

Important Reminder

The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.

Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.

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