Ethereum'southward native token Ether (ETH) looks poised to extend its selloff this week as information technology wobbles most a fundamental support level of $four,000.

ETH price dropped past over v.50% on December. 6 to an intraday depression at $three,913. In doing so, information technology slipped through upwards sloping back up that constituted an ascending channel that — more than or less — appears like a carry flag, a surly continuation setup.

ETH/USD daily price chart featuring Bear Flag setup. Source: TradingView

Conservative traders typically spot bear flags when an instrument consolidates college inside a parallel channel after a considerable toll drop (chosen flagpole). They anticipate the price to break below the flag'south lower trendline. And when it does, traders set their turn a profit target by measuring the flagpole'south top and subtracting it from the breakout level.

Applying the bull flag strategy to Ether's ongoing price trends, one tin expect the cryptocurrency to drop towards $three,200 in the sessions ahead. Interestingly, the level is also near the 0.5 Fib line (~$three,264) of the Fibonacci retracement graph fatigued from the $720-swing low to the $iv,808-swing high.

More confirmation needed

While the deport flag setup hints at more hurting for Ether ahead, some analysts believe the Ethereum token notwithstanding has more than room to run to the upside.

For case, PostyXBT, an independent market analyst, asked his massive follower-base of operations on Twitter to turn attending to Ether's deep cost wick from December. iv, underscoring how the cryptocurrency's sudden crash from almost $four,240 to as low as $iii,575 (data from Coinbase) was met by traders with an aggressive buying response.

"The weekly close above $4k ways that ETH is one of the strongest looking coins out there," the pseudonymous annotator noted, adding that not many held the construction "despite the wick."

ETH/USD weekly perpetual futures contract nautical chart. Source: TradingView

Meanwhile, another pop annotator Crypto FOMO also referred to the December. four rebound equally a reason to stay bullish on Ether. In an assay published Dec. vi, the analyst said that the cryptocurrency's power to hold its ascent channel support (the carry flag construction) might prompt bulls to push button its value to $10,000.

"That is also because Ethereum is crashing a lot lesser than other cryptos, which is very bullish," the channel noted while highlighting Ether's growing strength against Bitcoin (BTC).

Pinnacle 10 cryptocurrencies' operation against USD and BTC in the last 30 days. Source: Messari

On its weekly chart, Ether looks to have been eyeing a move toward $6,500 after breaking out of its ascending triangle.

In detail, the ETH price left the triangle range in the week catastrophe Oct. 25 after consolidating within it for a little over four months. Nonetheless, traders returned to examination the structure's upper trendline as back up, as is common across bullish continuation setups.

ETH/USD weekly price chart featuring Ascending Triangle setup. Source: TradingView

As long the price holds itself above the triangle's upper trendline, its likelihood of continuing its rally upward remains higher — past as much every bit the construction's maximum top, as shown in the chart above.

On the other hand, a decisive suspension below the triangle's lower trendline risked invalidating the bullish setup.

Strong fundamentals

James Wo, CEO/founder of DFG Group, a Singapore-based venture capital firm, blamed Ether's consistently positive correlation with Bitcoin behind its latest price corrections, noting that a spot market selloff in the BTC market, led by the ongoing Omicron FUD, has had exchanges liquidate $ii billion worth of traders' margined positions, pain ETH in tandem.

Related: BTC sentiment 'comparable to a funeral' — 5 things to spotter in Bitcoin this week

Simply the annotator, too, predictable a price rebound for ETH based on its successful adoption across the emerging nonfungible token (NFT), decentralized finance (DeFi) and metaverse space.

Top five DeFi chains based on total-book locked. Source: Defi Llama

"The levels of open up interest levels seen upwardly to this correction for both BTC and ETH were an important indicator that a bearish scenario was highly likely," Wo explained, adding:

"We nevertheless believe that fundamentals are potent and long-term valuations are still very low based on the technological advancements and contributions we are witnessing from this industry."

ETH/USD was trading at $iv,050 at the time of this writing.

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