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As Bitcoin finally rises above the long-awaited $100,000 milestone, Ethereum (ETH) is trying to break out of a key resistance zone. The second largest crypto rally has raised optimism about its intentions, with some suggesting it could mimic the BTC rally of 2020-2021.
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Ethereum is retracing $3,900
Ethereum, the second largest cryptocurrency by market capitalization, recorded an increase of 10% last week, from the $3,500 mark to the $3,900 resistance. On Wednesday, the King of Altcoins crossed the level of $3,800 for the first time in six months and continued to rise to retest the resistance of $3,900, which has not been seen since the beginning of March.
In the early hours of Thursday, ETH turned this key area into support, dropping briefly to $3,860 before bouncing back to the recently restored level. As the cryptocurrency nears its annual high of $4,093, sentiment around the token’s performance has shifted dramatically.
Ethereum is retesting a major multi-year resistance area, which could send ETH to a new ATH. According to analyst Alex Clay, the cryptocurrency is trying to break through the “Key Resistance Zone on a weekly basis.”
ETH has rested the key area five times since 2021, facing rejection of the upper resistance at $3,950 four times before. However, Ethereum broke this level towards the end of 2021, when it reached an all-time high (ATH) and stayed above it for almost three months.
The analyst noted that if the King of Altcoins successfully breaks above this level and turns it into support, it will be the next to “pierce” and hit its ATH. Clay added that he sees “no major rebound in the near term.”
Similarly, crypto analyst Jelle said that if Ethereum breaks above the March high, “all bets are off,” suggesting that the chances of ETH taking a long period of consolidation before a new ATH like BTC makes “were low too much.”
ETH Will Reach $10,000?
Jelle also noted that Ethereum’s current setup mimics that of Bitcoin in July 2020. According to the chart, Bitcoin broke out of a multi-year downtrend in mid-2020, followed by a massive 10-month 500-month rally towards the $60,000 mark in -April 2021.
The analyst noted that ETH broke a multi-year trendline today, as did BTC in 2020, which could trigger a similar rally to the top in the next few months. He added that investors “will get help if this plays out or anything like that.”
In another post, he emphasized that Ethereum started to rally when Bitcoin broke its ATH and entered a price recovery where BTC was trading almost 100% above its previous cycle high.
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He thinks it would be surprising “to see things play out the same way this time.” BTC and ETH are rising in tandem, resulting in ETH getting priced around ±$130,000.”
Based on this, the analyst believes that a 150-200% rally towards the $10,000-$12,000 price range of the cryptocurrency is possible this cycle. As of this writing, ETH is trading at $3,905, an increase of 2.4% in the daily time period.
Featured image from Unsplash.com, Chart from TradingView.com
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