One analyst has explained how ethereum is currently retesting a breakout zone and that this could lead to a price target of $3,500.
ethereum is retesting the breakout line of an ascending triangle
As analyst Ali noted in a new mail On X, ethereum may be preparing for a new rally right now as it is retesting the breakout zone of an ascending triangle.
An “ascending triangle” is a pattern in technical analysis that, as the name implies, resembles a triangle. The pattern involves a horizontal line formed by connecting highs and an inclined line joining higher lows.
When the price retests the upper horizontal level, it is likely to feel some resistance. On the other hand, a touch of the lower level could cause the price to rise again.
A break of any of these lines suggests a possible sustained continuation of the trend. Naturally, an upward breakout from the triangle implies bullish momentum, while a fall below means bearish momentum.
Like the ascending triangle, there is also the “descending triangle”, which is a similar pattern except for the fact that the two levels are swapped (since the predominant trend is down).
Now, here is the chart shared by Ali showing how price is interacting with an ascending triangle right now:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/12/Ethereum-Retests-Breakout-Zone-Analyst-Sets-3500-Target.jpeg" alt="ethereum Ascending Triangle” width=”2233″ height=”1452″ loading=”lazy”/>
Looks like the asset's value has plunged back towards the triangle in recent days | Source: @ali_charts on X
As can be seen from the chart, ethereum found a bottom at the bottom line of this ascending triangle pattern in October. After this low, the asset turned around with a strong rally and went on to challenge the upper line.
The cryptocurrency managed to find a break above the triangle and saw a continuation of the bullish momentum, exploring new highs for the year. However, lately the asset has fallen again and has now fallen towards the triangle breakout line.
So far, the line has provided support for the asset as its price has been able to stay above it. The analyst believes that this new test could be a sign that the currency is preparing for a new rally.
“The price range between $2,150 and $1,900 could be the ideal zone for accumulation before eth sets its sights on a higher target of $3,500,” Ali explains. From the current price, such a target would mean a rally of almost 60% for the asset.
October, the month in which ethereum broke out of the triangle's slope, was also a turning point for the asset in terms of on-chain activity, as the analytics firm glass node explained in its latest weekly report.
<img loading="lazy" decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/12/Ethereum-Retests-Breakout-Zone-Analyst-Sets-3500-Target.png" alt="ethereum On-Chain Activity” width=”2000″ height=”1152″ data-recalc-dims=”1″/>
The trend in three on-chain indicators for eth | Source: Glassnode's The Week Onchain - Week 51, 2023
From the chart, you can see that ethereum transaction count and transfer volume have been trending upward since the inflection point a couple of months ago, which could be bullish for the price.
eth Price
ethereum has become a bit stale recently as it has been consolidating around the $2,200 mark.
<img loading="lazy" decoding="async" class="alignnone size-medium aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/12/Ethereum-Retests-Breakout-Zone-Analyst-Sets-3500-Target" alt="ethereum price chart” width=”1534″ height=”870″/>
The price of the coin appears to have been moving sideways recently | Source: ETHUSD on TradingView
Featured image by Kanchanara on Unsplash.com, TradingView.com charts, Glassnode.com
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