Technical analysis shows that Ethereum has been trading in a rising channel pattern since July 2023, largely with a series of higher highs and higher lows. As it stands, recent market movements have caused Ethereum to retest the lower trendline of this ascending channel, which could make or break its performance in the coming months.
The current rising channel offers a promising outlook and a projection of a rally towards the upper limit of the channel, with a price target around $6,000. However, for Ethereum to capitalize on this upward momentumthe bulls will have to vigorously defend the lower trendline against bearish pressure.
Maintaining this level of support is important
At the time of writing, Ethereum is trading around $2,470, having dropped around 6.2% in the past 24 hours. In particular, this decline caused Ethereum to approach the critical lower trendline. This recent decline has also caught the attention of crypto analyst Ali Martinez marked the importance of the $2,400 support level as a critical zone to watch in the coming days.
Martinez highlights that Ethereum’s current position at $2,400 represents a key support area within its ascending channel. If this level holds, it could serve as a fundamental price floor, allowing Ethereum to recover and continue forming higher highs along a bullish trajectory.
Martinez predicts that with enough support at $2,400, Ethereum could rise to a target of $6,000. Such a move would mark a break above the current Ethereum all-time high and a 150% increase from the current support zone, indicating a strong bullish phase if bulls successfully defend this key level.
However, if the Ethereum bulls were to fail to hold above this level, it could lead to further declines. In such a scenario, Martinez suggests setting a stop loss between $2,300 and $2,150 to maintain a favorable risk-reward ratio.
Ethereum seems ready
In another technical analysis of Ethereum’s price action, crypto analyst Javon Marks highlighted that Ethereum looks done now for a long-awaited rally. Marks identifies key bullish targets at $4,000, $4,811 and $8,400, representing potential gains of 61%, 94% and 240% from Ethereum’s current price.
Reaching these milestones could not only boost Ethereum’s price but also trigger rallies in other altcoins, essentially kicking off the altcoin phase in this market cycle.
Ethereum’s journey to these ambitious price levels and the associated ones opportunity to challenge Bitcoin market dominance will be closely linked to the activity of large-scale investors, often called whales.
Recent data from on-chain analytics platform Santiment shows a significant increase in Ethereum whale activity, which hit a six-week high on Friday. This spike in activity suggests that large holders have started collecting Ethereumwhich could serve as a strong foundation for the expected price rally.
Featured image from Pexels, chart from TradingView