Ethereum's native token, Ether (ETH), has continued its decline into December after dropping about 30% over the past three months, raising concerns in the market about a potential increase in the decline before the end of the year.
Key points:
If the MVRV support and flag pattern are broken, ETH may slide towards the $2500-$2200 range.
A potential descending wedge breakout keeps hopes alive for bulls to push towards $3550.
According to Glassnode data, as of Tuesday, ETH tested its -0.5σ MVRV deviation band (cyan) for the second time in a week as support, currently located around $2820-$2830.
The MVRV indicator compares ETH's market price to the level at which holders last moved their coins, and this indicator often highlights key support and resistance areas.
Thus, the -0.5σ band repeatedly plays an important mid-cycle support role during a downtrend.
Analysts noted that after ETH decisively broke below the -0.5σ band in March, it triggered a 40% drop, with the price subsequently moving closer to the realized price band (purple), becoming the first major downside target.
Market experts believe that if there is a sustained break below the -0.5σ support this time, attention will again turn to the realized price near $2500, a level that has historically acted as a downward magnet during market pullbacks.
ETH's recent price action has formed a bearish flag consolidation pattern on the daily chart, which is a continuation pattern that typically appears after a sharp decline and continues to develop in the direction of the prior trend.
If the flag consolidation pattern confirms a downward breakout, the price may make a measured move towards the $2200-$2220 area, representing a drop of about 20% from the current price level. This price range coincides with the 0.786 Fibonacci retracement level of the 2025 uptrend and the previous demand zone from April.
Analyst Don shared that the downward target in the descending wedge pattern also appears near the wedge's apex.
Descending wedge patterns typically lead to price breakouts; however, this may indicate that ETH is likely to form a local bottom in December in the $2200-$2220 area.
As shown in the chart below, if the price breaks above the wedge's upper trend line, ETH is expected to rise to $3550 at the beginning of the new year.
This upside target aligns with predictions made by several analysts regarding ETH's price during the recent decline. Other ETH valuation models further predict that ETH's price will break above $4000, suggesting that this cryptocurrency is currently "undervalued."
Related: Ethereum ICO wallets transfer $120 million in ETH to staking after ten years
This article does not constitute any investment advice or recommendation. All investment and trading activities carry risks, and readers should conduct their own research before making decisions.
Original article: “Ethereum Price Analysis: Will ETH Continue to Decline in December?”
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