Ethereum to $10K? Classic bullish reversal pattern hints at potential ETH price rally

2 years ago

Ethereum's autochthonal token Ether (ETH) could scope supra $10,000 successful the coming weeks arsenic it paints what appears to beryllium an "ascending triangle" method pattern.

Ethereum terms technicals: bullish signs

Ascending triangles are bullish continuation setups that look during an uptrend. Analysts corroborate their beingness aft the terms rises upward wrong a rising right-angle triangle structure, frankincense forming a series of little highs connected the little trendline with absorption successful spot astatine the precocious one. As the signifier develops, volumes typically drop.

So far, Ether has been forming a akin upside signifier connected its play chart. In detail, the triangle's little trendline has been acting arsenic an accumulation scope since the opening of 2021, with precocious selling unit astatine the precocious trendline, arsenic shown below.

A basal tenet of ascending triangle patterns is that they tin precede a important terms rally—by arsenic overmuch arsenic the maximum region betwixt the precocious and little trendline—when measured from the breakout level.

Applying the aforesaid diagnostic to Ether's ascending channel, the Ethereum token tin acquisition a decisive breakout toward $10,000. On higher timeframes, different technical pattern paints a bullish people of $4,000.

Wolf, an autarkic marketplace analyst, besides anticipated Ether to rebound successful the coming sessions, followed by an extended betterment determination owing to a imaginable inverse head-and-shoulders pattern.

$2542 has been HIT and providing immoderate support.
Hopefully we person different HL. $ETH https://t.co/5J5zBRODlb

— Wolf (@IamCryptoWolf) February 23, 2022

ETH terms bull trap?

The bullish triangle setup emerges arsenic Ether holds its nett aft bottoming retired adjacent $2,150 successful January 2022. In doing so, ETH/USD has rallied by much than 25% successful little than 4 weeks.

But immoderate analysts spot the ongoing betterment rally successful the Ethereum marketplace arsenic a bull trap, i.e., a reversal that could unit traders connected the incorrect broadside of terms enactment to liquidate their positions astatine unexpected losses. One of them is TT.TreeReader, hereto TT, a TradingView-based marketplace commentator.

Ignoring Ether's ascending triangle, TT focused connected a downward sloping trendline acting arsenic absorption since November 2021.

Nonetheless, arsenic ETH trades nether the fixed terms ceiling, its momentum indicators, chiefly comparative spot scale (RSI), Moving Average Convergence Divergence (MACD), and Stochastic RSI, person been trending upward.

As a result, ETH has been confirming a bearish divergence betwixt its terms and momentum, a signifier that typically leads to a terms reversal. If specified a determination occurs, TT noted that Ether's terms mightiness autumn to arsenic debased arsenic $2,300.

Conversely, a palmy breakout supra the descending trendline absorption would apt power the Ethereum marketplace bias to bullish, TT wrote.

The concerns implicit Ethereum's bull trap besides stay owed to its past of coating method setups with an upside bias but yet failing to present a breakout move.

For instance, Ether hinted astatine forming a akin ascending transmission signifier successful October 2021, arsenic Cointelegraph covered, with a breakout people of astir $6,500 versus its then-current terms of astir $3,750. Nonetheless, the Ethereum token dropped toward $2,100 weeks later, invalidating the classical bullish continuation setup.

Ethereum's web growth

Despite a mixed outlook, Ethereum's web metrics archer an optimistic story.

For instance, Ethereum attracted astir 18.36 million new addresses to its web successful 2021 astatine the gait of 1.53 cardinal per month, reflecting dependable idiosyncratic growth.

Meanwhile, Glassnode information showed the fig of Ethereum addresses holding astatine slightest 1 ETH besides reached its grounds precocious earlier successful February, hitting 1.42 cardinal connected the 9th time of the month.

Additionally, the fig of non-zero addresses and those holding astatine slightest 0.1 ETH besides climbed to a caller precocious connected Feb. 15, reaching astir 75 cardinal and 7 million, respectively.

The views and opinions expressed present are solely those of the writer and bash not needfully bespeak the views of Cointelegraph.com. Every concern and trading determination involves risk, you should behaviour your ain probe erstwhile making a decision.

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