Ethereum (ETH) price drops by 14% in the first week of 2022

It has already been a week since the start of the new year, and so far, the crypto market does not seem to behave as it did in the first days of 2021. The prices may be much higher now than they were last year at this time, but the trend is far from being the same.

In early 2021, most cryptocurrencies were growing — some slowly, others rapidly, but the prices have been on the rise, led by Bitcoin’s rally that started in the second half of 2020. These days, however, the market is trading in the red, with most coins still correcting from all-time highs or dropping after being rejected by powerful resistance levels.

This even goes for the world’s largest altcoin, Ethereum (ETH). The crypto industry’s second largest cryptocurrency and the largest altcoin has seen a 14% drop in this first week of 2022, and for the time being, the drop still appears to be a part of the price correction that followed after the coin’s mid-November milestone.

But, more about that later. Ethereum has had a very busy and eventful year, which might explain why its price is correcting as strongly as it does.

Ethereum in 2021

Ethereum price ended in 2020 and started in 2021 fairly low, considering its value these days. Back then, it was only worth $730 per coin on January 1st, 2021, but this started to change very quickly.

On the very next day, January 2nd, the coin reached $775, and by January 3rd, it already climbed to $975. Its rise was rapid, and it did not stop until the coin hit a resistance at $1,200 on January 6th. While it did briefly breach it, the barrier did not break, and it did not turn into a support at that time. Instead, it pushed the coin down to a support at $1,000. From here, ETH immediately skyrocketed back up, broke the $1,200 barrier, and went straight for the next one at $1,400.

It stopped before ever reaching it, and its price was rejected again — this time to its brand new support at $1,200. All of this happened within only the first three weeks of 2021, and it was a hint of future volatility which caused a lot more fluctuations and price swings.

Following this latest drop, Ethereum price started to grow and breach one resistance after another. Some were strong enough to briefly pause its progression, or even push it back down for a bit, but ultimately, they failed. For the next month, Ethereum price kept growing until it reached a major resistance at $2,000. This level was so strong that it knocked the coin’s price right back down to $1450, and just like before, ETH bounced right back up to try again.

For the second time, this level rejected it, but this time, the rejection was much weaker. ETH managed to reclaim control by the time it reached $1,600. It then surged for the third time, breaching the resistance at $2k and turning it into its strongest support — one that managed to hold its price from going below it for the rest of the year. This was on April 1st, and from that point forward, ETH skyrocketed higher than ever before, including its impressive surge from late 2017 and early 2018. The coin kept climbing up until it hit an ATH at $4,170, which took place on May 11th.

Now, the coin would potentially continue this climb beyond this date, if not for the fact that this was the day when the market-wide crypto price crash took place, robbing most coins of 50% of their value. Ethereum itself lost this exact amount, crashing down to $2,100 by May 23rd.

However, as soon as it dropped to this bottom, it sprung back up. Unfortunately, it did not get very far — only to around $2,888 — before dropping again. It surged for the third time, with rather similar results. Over the summer, its price kept going down with an occasional attempt to surge. For the most part, however, it spent its summer at its new bottom at $2,000.

Things finally took a turn for the better in late July, when ETH started skyrocketing again until it reached a barrier at $3,200. This level kept it from progressing throughout August, and it finally broke in the first days of September 2021.

After breaching the resistance, ETH surged further up, hitting $4,000 for the second time last year. And, for the second time, its price was rejected. First, it dropped back to $3,200, and then it attempted to surge. After reaching $3,600, it was sent back down again, this time to $2,800.

Around that time, a new rally started, and Ethereum was more than happy to answer its call. This final big rally of 2021 started on September 28th for ETH, and it took it to $4,812 by November 8th of the same year.

The end of 2021 and the start of the new year

From that point forward, Ethereum’s price started seeing ups and downs, but the long-term trend turned to bearish. The coin first dropped from this ATH to $4,000, only to surge to $4,630 in the last attempt to go back up. After that, each new drop has been deeper, and each attempt at recovery weaker, until the very last days of the year, which saw ETH drop to $3,630.

The coin saw one final, brief increase on December 31st which carried over into January 1st, 2022, but this only took it up to $3,830. This was on January 2nd, and for the five days following that surge, Ethereum has been in free fall that took it all the way down to its price at the time of writing (January 7th, 2022), at $3,232.

This current drop appears to still be a part of the correction following the ascension to Ethereum’s all-time high, and there is no way to tell with certainty when it might stop. For the time being, the support at $3,200 is still holding, and it might continue to hold going forward, as well. But, for now, the entire crypto industry is trading in the red, so Ethereum’s price is out of the coin’s control. The bears are ruling the market currently, and until they withdraw, investors will stay on the lookout and try to find the best moment to buy the dip.

To learn more about this token visit our Investing in Ethereum guide.