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An analyst has revealed what might need to happen for Ethereum to climb back towards the $6,000 mark, based on a trend currently forming in its price.
Ethereum appears to be moving in an ascending channel recently
In a new article on X, analyst Ali Martinez discussed a pattern that Ethereum has potentially followed recently. The model in question is the “Ascending Channel” from technical analysis (TA).
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Parallel channels form when the price of an asset consolidates between two parallel trend lines. The upper level of the channel is drawn by connecting successive highs, while the lower level joins the lows.
This model can take three orientations: positive slope, negative slope and zero slope. In the first case, the trendlines follow an upward consolidation phase, and the pattern is known as an ascending channel. Similarly, in the second case, the price is trending downward, the formation being called a descending channel. The third type, where the trend lines are parallel to the time axis, does not have a specific name.
Like other consolidation patterns in TA, the upper line of a parallel channel is likely to act as resistance to the price, while the lower line may act as a support point. Breaks above either of these lines may imply a continuation of the trend in that direction; an exit above the channel is bullish and a fall below it is bearish.
Now here is the chart shared by the analyst that shows the ascending channel that Ethereum may have been trading in over the past two years:
As seen in the chart above, Ethereum price retested the upper level of this channel during last year’s first quarter rally. The cryptocurrency was rejected at the level and began on a downward trajectory that would eventually force it to retest the lower line.
ETH spent some time touching the line several times during the retest, but the pattern eventually held up as the coin rebounded. The resulting rally, however, was unable to take the price to a higher level, as it actually only stopped halfway through the course. The asset has since been in decline.
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Interestingly, a similar pattern was also seen in 2023, where a rejection midway through the channel led Ethereum to a retest of the results, which triggered the bull run.
In the chart, Martinez highlighted what the next ETH price trend could look like if a similar trajectory also continues. “If Ethereum $ETH follows an ascending parallel channel, a decline towards the lower limit at $2,800 could serve as a launching pad for a move towards $6,000,” notes the analyst.
At the cryptocurrency’s current price, a bullish rally to that final target of $6,000 would imply growth of almost 82%.
ETH Price
Ethereum has yet to noticeably recover from its recent slide, with its price still trading around $3,300.
Featured image of Dall-E, charts from TradingView.com
