Ethereum (ETH) broke through local resistance at the $3,670 price level earlier today, reviving hopes of a successful breakout through the $4,000 sustained resistance. Some crypto experts are hoping that ETH may be the case stop to reach a new all-time high (ATH).
Will Ethereum Benefit from an Inverse Head and Shoulders Pattern?
Ethereum, the second largest digital asset with a market cap of more than $450 billion, seems set to target the key resistance level of $4,000 again. For context, ETH has tested the $4,000 level three times since March 2024, failing to break through each time.
According to experienced cryptocurrency analyst and trader Trader_XO, the fourth attempt may finally succeed. The analyst shared his thoughts on X, suggesting that tapping the $4,000 level for the fourth time increases the chances of breaking this stubborn price barrier.
Trader_XO analysis includes a chart showing the formation of an inverse head and shoulders pattern. For those unfamiliar, this bullish chart formation indicates a potential downtrend reversal. It consists of three grooves: the lower one – “head” – between the two lower ones – “shoulders.”
A break usually occurs when the price crosses the “neck line” that connects the peaks between the troughs. In Ethereum’s case, the neckline is somewhere around the $4,000 price level. A definite break above $4,000, followed by a successful retest of this level as new support, could position ETH to pursue new ATHs in the near future.
Trader_XO’s analysis is in line with that of another crypto analyst, Daghan, who suggested that ETH’s new ATH could pave the way for an increase up to $8,047. Commentator noted:
ETH it needs to break above $4150 for the real fun to begin. Nothing has really started yet. This is a book progression pattern that can lead to strong momentum, but it takes time to fully develop.
Some Technical Indicators Work with ETH
Despite the opposite head and shoulders pattern, crypto analyst Ali Martinez emphasized that Ethereum is “holding firmly” within the corresponding rising channel, targeting the 6,000 price level.
Additionally, an ascending parallel channel is a bullish chart pattern characterized by two upward parallel trend lines containing price action. This pattern shows consistent highs and lows, indicating a consistent uptrend with potential breakouts occurring above or below the channel.
Additionally, a recent report noted that Ethereum’s weekly Relative Strength Index (RSI) has reset, which may provide additional impetus for ETH to create new ATHs. At press time, ETH is trading at $3,696, up 1.9% in the last 24 hours.
Featured image from Unsplash.com, Charts from X and TradingView.com