Ethereum (ETH) surged past the local resistance at the $3,670 price level earlier today, rekindling hopes for a successful breakout through the persistent $4,000 resistance. Some crypto experts are optimistic that ETH might finally be poised to reach new all-time highs (ATH).
Ethereum To Benefit From Inverse Head-And-Shoulders Pattern?
Ethereum, the second-largest digital asset with a market cap exceeding $450 billion, appears set to target the critical $4,000 resistance level once again. For context, ETH has tested the $4,000 level three times since March 2024, failing to break through on each occasion.
According to seasoned cryptocurrency analyst and trader Trader_XO, the fourth attempt might finally succeed. The analyst shared their thoughts on X, suggesting that tapping the $4,000 level for the fourth time increases the likelihood of breaking through this stubborn price barrier.
Trader_XO’s analysis included a chart indicating the formation of an inverse head-and-shoulders pattern. For those unfamiliar, this bullish chart formation signals a potential reversal of a downtrend. It consists of three troughs: a lower low – the “head” – between two higher lows – the “shoulders.”
A breakout typically occurs when the price surpasses the “neckline” connecting the peaks between the troughs. In Ethereum’s case, the neckline is situated around the $4,000 price level. A definitive breakout above $4,000, followed by a successful retest of this level as new support, could position ETH to pursue new ATHs in the near future.
Trader_XO’s analysis aligns with that of another crypto analyst, Daghan, who suggested that a new ATH for ETH could pave the way for a surge to as high as $8,047. The analyst noted:
ETH needs to break above $4150 for the real fun to start. Nothing has truly begun yet. This is a textbook continuation pattern that will likely lead to a strong impulse, but it takes time to fully develop.
Other Technical Indicators Bullish For ETH
In addition to the inverse head-and-shoulders pattern, crypto analyst Ali Martinez highlighted that Ethereum is “holding strong” within an ascending parallel channel, targeting the $6,000 price level.
To elaborate, an ascending parallel channel is a bullish chart pattern characterized by two upward-sloping parallel trend lines that contain the price action. This pattern reflects consistent higher highs and higher lows, signaling a steady upward trend with potential breakouts occurring above or below the channel.
Additionally, a recent report noted that Ethereum’s weekly Relative Strength Index (RSI) has reset, which could provide further momentum for ETH to establish new ATHs. At press time, ETH trades at $3,696, up 1.9% in the past 24 hours.
Featured Image from Unsplash.com, Charts from X and TradingView.com
