Ethereum (ETH) broke through local resistance at the $3,670 price level earlier today, reviving hopes of a successful breakout through the persistent $4,000 resistance. Some crypto experts are optimistic that ETH may eventually Headed towards To reach new all-time high (ATH).
Will Ethereum Benefit from an Inverted Head-and-Shoulders Pattern?
Ethereum, the second-largest digital asset with a market cap of over $450 billion, is set to once again target the crucial $4,000 resistance level. For context, ETH has tested the $4,000 level three times since March 2024, failing to break it on each occasion.
According to veteran cryptocurrency analyst and trader Trader_XO, the fourth attempt may ultimately be successful. Analysts sharing their views on X suggested that reaching the $4,000 level for the fourth time increases the chances of breaking this stubborn price barrier.
Trader_XO’s analysis includes a chart indicating the formation of an inverse head and shoulders pattern. For those unfamiliar, this bullish chart formation signals a possible reversal of a downtrend. It consists of three troughs: a low low part – the “head” – between two high low parts – the “shoulders”.
A breakout usually occurs when the price exceeds the “neckline” connecting the peaks and troughs. In the case of Ethereum, the neckline is located around the $4,000 price level. A definite breakout above $4,000, followed by a successful retest of this level as new support, could position ETH to push to new ATHs in the near future.
Trader_XO’s analysis matches that of another crypto analyst, Deghan, who suggested that a new ATH for ETH could pave the way for a rise to $8,047. The analyst noted:
ETH It needs to break above $4150 for the real fun to start. Nothing has actually started 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 are bullish for ETH
In addition to the inverted head-and-shoulders pattern, crypto analyst Ali Martinez highlighted that Ethereum “remains strong” within an ascending parallel channel, aiming for the $6,000 price level.
Broadly speaking, an ascending parallel channel is a bullish chart pattern characterized by two upward sloping parallel trend lines that join price action. This pattern shows consecutive higher highs and higher lows, indicating a stable uptrend with a possible breakout occurring above or below the channel.
Additionally, a recent report noted Ethereum’s weekly Relative Strength Index (RSI) has reset, which could provide further momentum to ETH to install New ATH. At press time, ETH is trading at $3,696, up 1.9% over the past 24 hours.
Featured image from Unsplash.com, X and chart from tradingview.com
