While Ethereum (ETH) kicks off the year with a rally past the critical $3,000 threshold amid a broader cryptocurrency market rally in early 2026, it continues to struggle against a key resistance level at $3,400. Currently, the second largest cryptocurrency is entering a consolidation phase below this significant mark.
Technical analyst Ali Martinez suggested that if the buying momentum seen in recent weeks persists, Ethereum could soon embark on a new rally that could bring it closer to reaching all-time highs.
Ethereum set for potential price breakout
In a recent update Shared on social media platform X (formerly Twitter), Martinez highlighted on-chain indicators suggesting new bullish sentiment among Ethereum investors. Notably, daily active addresses on the Ethereum network have increased, doubling to exceed 800,000 in just two weeks.
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Martinez’s analysis further hints at a potential correlation with the growing demand for Ethereum exchange-traded funds (ETFs). Since December 29, these investment vehicles have accumulated approximately 158,545 ETH, a sum valued at approximately $520 million, reinforcing the positive outlook for the altcoin.
This increased on-chain activity has created substantial support levels for Ethereum price action going forward, particularly between $2,772 and $3,109, which could prevent a further fall below these key levels.
Martinez believes that if these support levels remain intact and buying pressure continues, a break above the crucial resistance at $3,400 could pave the way for a significant rally towards $4,000, representing an increase of approximately 24.33% from its current trading level of approximately $3,217.
What lies ahead for Altcoin?
Other analysts, like those at BitBull, share a optimistic view of the ETH price trajectory. The analyst identified a potential inverse head-and-shoulders pattern forming in the 10-day chart, which could lead to a bullish price target of $5,000. This projection implies a remarkable increase of 55.48%, surpassing last year’s records.
However, despite these bullish forecasts, the price of Ethereum fell 3% over a 24-hour period, according to CoinGecko data. The cryptocurrency has yet to demonstrate the bullish momentum needed to achieve these goals.
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Another encouraging factor for investors looking for a price rise is liquidity. Market expert Ted Pillows recently note that, following the latest Ethereum price drop, the maximum problem appears to be tilting upwards.
Historically, large investors and institutions have tended to “hunt” liquidity levelswhich makes it possible to redefine the positioning on the market and to evacuate many individual investors.
With approximately $3.4 billion in short positions at risk if Ethereum manages to breach the $3,400 mark in the coming days, the possibility of a significant price move looms.
Featured image of DALL-E, chart by TradingView.com
