Ethereum (ETH) broke above local resistance at the $3,670 price level earlier today, reviving hopes of a successful breakout through the lingering resistance at $4,000. Some crypto experts are optimistic that ETH could finally be ready to reach new all-time highs (ATH).
Will Ethereum benefit from an inverted head and shoulders pattern?
Ethereum, the second-largest digital asset with a market capitalization above $450 billion, appears set to once again target the critical resistance level of $4,000. As a reminder, ETH has tested the $4,000 level three times since March 2024, failing each time.
According to Trader_XO, a seasoned cryptocurrency analyst and trader, the fourth attempt may finally succeed. The analyst shared his thoughts on X, suggesting that hitting 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 is made up of three hollows: a lower one – the “head” – between two higher ones – the “shoulders”.
A breakout usually occurs when the price rises above the “neck line” connecting the highs between the lows. In the case of Ethereum, the neckline is 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 rise to as high as $8,047. The analyst noted:
ETH must exceed $4,150 for the real fun to begin. Nothing has really started yet. This is a textbook continuation pattern that will likely lead to strong momentum, but it takes time to fully develop.
Other Bullish Technical Indicators for ETH
In addition to the inverted head-and-shoulders pattern, crypto analyst Ali Martinez highlighted that Ethereum is “holding strong” in an ascending parallel channel, targeting the $6,000 price level.
To be more specific, an ascending parallel channel is a bullish chart pattern characterized by two ascending parallel trend lines that contain price action. This trend reflects consistent higher highs and lows, signaling a steady uptrend with potential breakouts occurring above or below the channel.
Additionally, a recent report note that Ethereum’s weekly Relative Strength Index (RSI) has reset, which could provide additional momentum for ETH to establish new ATHs. At press time, ETH is trading at $3,696, up 1.9% in the last 24 hours.
Featured image from Unsplash.com, charts from X and TradingView.com
