Ethereum Tests Breakout Zone, Analyst Predicts $3,500 Price Target
An analyst has explained how Ethereum is currently retesting a breakout zone, which could lead to a price target of $3,500.
Ethereum Retests Ascending Triangle Breakout Line
As noted by analyst Ali in a recent tweet, Ethereum may be gearing up for a new rally as it retests the breakout zone of an ascending triangle.
An «ascending triangle» is a pattern in technical analysis that, as the name suggests, resembles a triangle. The pattern involves a horizontal line formed by connecting highs and an upward sloping line connecting higher lows.
When the price retests the upper horizontal level, it is likely to face some resistance. On the other hand, a touch of the lower level could cause the price to rise again.
A breakout from either of these lines suggests a possible sustained continuation of the trend. Naturally, an upward breakout from the triangle implies a bullish momentum, while a drop below signifies a bearish momentum.
Similar to the ascending triangle, there is also the «descending triangle,» which is a similar pattern except for the fact that the two levels are swapped (as the prevailing trend is downwards).
Now, here is the chart shared by Ali showing how the price is interacting with an ascending triangle at the moment:
Looks like the asset's value has plunged back towards the triangle in recent days | Source: @ali_charts on X
As seen in the chart, Ethereum found a bottom at the lower line of this ascending triangle pattern in October. After this low, the asset turned around with a strong rally and went on to challenge the upper line.
The cryptocurrency managed to break out above the triangle and witnessed a continuation of the bullish momentum, exploring new highs for the year. However, lately, the asset has fallen back and is now retracing towards the triangle’s breakout line.
So far, the line has provided support to the asset as its price has been able to stay above it. The analyst believes that this new retest could be a signal that the coin is gearing up for a new rally.
«The price range between $2,150 and $1,900 could be the ideal accumulation zone before ETH sets its sights on a higher target of $3,500,» explains Ali. From the current price, such a target would mean a nearly 60% rally for the asset.
October, the month when Ethereum broke out of the triangle’s slope, was also a turning point for the asset in terms of on-chain activity, as analytics firm Glassnode has explained in its latest weekly report.
The trend in three on-chain indicators for ETH | Source: Glassnode's The Week Onchain - Week 51, 2023
In the chart, it can be seen that Ethereum’s transaction count and transfer volume have been on an upward trend since the turning point a couple of months ago, which could be bullish for the price.
ETH Price
Ethereum has been somewhat stagnant recently, as it has been consolidating around the $2,200 mark.
The price of the coin appears to have been moving sideways recently | Source: ETHUSD on TradingView
Featured image by Kanchanara on Unsplash.com, charts by TradingView.com, Glassnode.com
Disclaimer: The article is provided for educational purposes only. It does not represent the views of NewsBTC on whether to buy, sell, or hold investments, and naturally, investing carries risks. It is recommended to conduct your own research before making any investment decisions. Use the information provided on this website at your own risk.