As Ethereum (ETH) attempts to turn a crucial level into support, some analysts have shared a bullish outlook for the cryptocurrency, which could push its price above the $4,000 barrier in the first quarter of 2026.
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End-of-year weakness to spark first-quarter rally
On Monday, Ethereum broke the $3,200 mark for the first time in nearly a month, hitting a four-week high of $3,259. The cryptocurrency has seen an 8.3% rise from the crucial $3,000 level since Friday, consolidating above the $3,100 level over the weekend.
Now the king of Altcoins is trying to hold the key resistance level and turn it into support. Amid this performance, some market watchers shared a potential setup that could lead to a significant rally over the next three months.
In an article X, analyst Niels claimed that Ethereum’s quarterly close in the red is “not as bearish as it seems.” Notably, the altcoin recorded its worst fourth quarter in six years after closing the quarter with a negative return of 28.28%, according to CoinGlass data.
This is ETH’s first negative Q4 close since 2022 and its worst year-end performance since 2019, when it returned a negative 28.9%. Nonetheless, Niels highlighted that this opens the door for an “interesting” setup ahead of the altcoin’s expected seasonality.
“The story tells an interesting story: every time ETH ends the fourth quarter in the red, the following first quarter closes in the green,” the analyst explained, saying that “year-end weakness generally acted as a reset and not a reversal.”
According to the article, year-end leverage and cooling sentiment have already allowed Ethereum to start the new year “from a cleaner footing,” helping the altcoin record quarterly returns of up to 52% in recent years.
“If this trend continues, the fourth quarter was not the warning; it was the pattern before the first quarter,” he suggested.
Ethereum prepares for a 30% breakout
As the price records an 11% weekly rise, analyst Ted Pillows highlighted that the cryptocurrency is about to face a significant zone that has served as resistance for almost two months.
Since the early November pullback, the largest altcoin by market cap has been trading between $2,700 and $3,400, seeing strong resistance around the $3,000 and $3,200 levels.
Now that the middle zone of the range has been momentarily reclaimed, ETH must maintain its momentum and turn the upper boundary into support. “A rise from this level will push Ethereum towards the $3,800 to $4,000 level,” where the next major resistance lies, Ted explained Monday morning.
On the contrary, a rejection from this resistance zone could send ETH price towards the $3,000 support, while risking a longer consolidation within its two-month range.
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Meanwhile, analyst Ali Martinez discussed the altcoin’s consolidation, highlighting the formation of a symmetrical triangular pattern on his chart. According to the analyst, Ethereum has been compressing between the ascending and descending trend lines since November, expecting a 30% move.
If the price maintains its current breakout from the upper boundary, the cryptocurrency could see a rally towards the $4,000 zone in the coming weeks, positioning ETH for a retest of Q3 levels.
At the time of writing, Ethereum is trading at $3,253, an increase of 3.4% on the daily time frame.
Featured image from Unsplash.com, chart from TradingView.com
