ethereum (eth) broke above local resistance at the $3,670 price level today, rekindling hopes of a successful breakout through the persistent $4,000 resistance. Some crypto experts are optimistic that eth could finally be ready to reach new all-time highs (ATH).
Will ethereum Benefit From Inverse Head and Shoulders Pattern?
ethereum, the second-largest digital asset with a market capitalization exceeding $450 billion, appears set to once again target the critical $4,000 resistance level. For context, eth has tested the $4,000 level three times since March 2024, failing to surpass it each time.
According to experienced cryptocurrency analyst and trader Trader_XO, the fourth attempt could finally be successful. The analyst shared his thoughts on x, suggesting that reaching the $4,000 level for the fourth time increases the probability of breaking 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 indicates a possible reversal of a bearish trend. It consists of three valleys: a lower low – the “head” – between two higher lows – the “shoulders”.
A breakout typically occurs when the price breaks above the “neckline” that connects the peaks to the lows. In the case of ethereum, the neckline is around the $4,000 price level. A definitive break above $4,000, followed by a successful retest of this level as new support, could position eth to seek 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 as high as $8,047. The analyst noted:
eth It needs to break above $4150 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 technical indicators are bullish for eth
In addition to the inverse head and shoulders pattern, crypto analyst Ali Martinez highlighted that ethereum is “holding strong” within an ascending parallel channel, targeting the $6,000 price level.
Specifically, an ascending parallel channel is a bullish chart pattern characterized by two parallel upward-sloping trend lines containing price action. This pattern reflects consistent higher highs and higher lows, indicating a consistent uptrend with possible breakouts above or below the channel.
Furthermore, a recent report noted that ethereum's weekly Relative Strength Index (RSI) has reset, which could provide further impetus for eth establish new ATH. At press time, eth is trading at $3,696, up 1.9% in the last 24 hours.
Featured image from Unsplash.com, x charts and TradingView.com
