- Ethereum price slid below two critical levels of defense as the bears kickstarted a sell-off.
- A 14% decline toward $2,452 is put on the radar, given by the prevailing chart pattern.
- The bulls would need to reclaim $2,870 as support to reverse the period of underperformance.
Ethereum price has dropped below two significant footholds on January 21, as selling pressure increased. ETH could be at risk of declining an additional 14%, a pessimistic forecast given by the bearish chart pattern.
Ethereum price loses two critical support levels
Ethereum price broke below the multi-month support trend line that formed since September 21 at $2,959. The spike in buy orders has also pushed ETH below the lower boundary of the descending parallel channel on the 4-hour chart located at $2,870, suggesting that ETH could put a 14% decline on the radar, toward $2,452.
The Arms Index (TRIN) which gauges overall market sentiment suggests that there is an uptick of sellers in the market, indicating some investors are panicking, leading to a sell-off.
The first line of defense for Ethereum price is at the September 28 low at $2,782. An additional foothold may emerge at the 127.2% Fibonacci extension level at $2,652, coinciding with the September 21 low.
Ethereum price may discover another line of support at the July 24 high at $2,553 before ETH plunges toward the downside trend line of the lower parallel channel, a bearish projection given by the prevailing chart pattern at $2,452, coinciding with the 161.8% Fibonacci extension level.
However, if buying pressure increases, the first line of resistance is at the lower boundary of the prevailing chart pattern at $2,870, then at the 78.6% Fibonacci retracement level at $2,933.
ETH/USDT 4-hour chart
Additional obstacles may appear at the 61.8% Fibonacci retracement level at $3,031, then at the 50% retracement level at $3,099 which coincides with the middle boundary of the governing technical pattern and the 21 four-hour Simple Moving Average (SMA).
Buyers will struggle to lift prices higher above $3,167, where the 38.2% Fibonacci retracement level sits, and at the 23.6% Fibonacci retracement level at $3,252, intersecting with the 100 four-hour SMA.