Ethereum (ETH) surged past local resistance at the $3,670 price level earlier today, rekindling hopes of a successful breakout through the persistent $4,000 resistance. Some crypto experts are optimistic that ETH may finally be ready to reach new all-time highs (ATH).
Ethereum to benefit from inverse head-and-shoulders pattern?
Ethereum, the second largest digital asset with a market capitalization exceeding $450 billion, appears to be once again targeting the critical resistance level of $4,000. 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. Sharing his thoughts on X, the analyst suggested that pushing the $4,000 level for the fourth time increases the likelihood of breaking through this stubborn price barrier.
Trader_XO’s analysis included a chart indicating the formation of a head-and-shoulders reversal pattern. For those not in the know, this bullish chart formation signals a potential reversal of a downtrend. It consists of three troughs: a lower low – the “head” – between two higher lows – the “shoulders”.
A breakout usually occurs when the price exceeds the “neck line” that connects the highs between the lows. In Ethereum’s case, the neckline is around the $4,000 price level. A definitive breakout 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 is in line with another crypto analyst, Daghan, who suggested that a new ATH for ETH could pave the way for a rise to as high as $8,047. The analyst noted:
ETH must go above $4150 for the real fun to begin. Nothing has really started yet. This is a textbook continuation pattern that is likely to lead to strong momentum, but takes time to fully develop.
Other Technical Indicators Bullish for ETH
In addition to the inverted head-and-shoulders pattern, crypto analyst Ali Martinez emphasized that Ethereum is “holding strong” within an ascending parallel channel, targeting the $6,000 price level.
To elaborate, a rising parallel channel is a bullish chart pattern characterized by two upward sloping parallel trend lines containing the price action. This pattern consistently reflects higher highs and higher lows, signaling a steady uptrend with potential breakouts occurring above or below the channel.
Also a recent report noted that Ethereum’s weekly Relative Strength Index (RSI) has reset, which could provide further momentum for ETH to determine new ATH. At press time, ETH is trading at $3,696, up 1.9% over the past 24 hours.
