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An analyst has revealed what may need to happen for Ethereum to rally toward the $6,000 mark, based on a pattern currently forming in its price.
Ethereum Has Appeared To Be Moving Inside An Ascending Channel Recently
In a new post on X, analyst Ali Martinez has discussed a pattern that Ethereum has potentially been following recently. The pattern in question is the “Ascending Channel” from technical analysis (TA).
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Parallel Channels form when the price of an asset consolidates between two parallel trendlines. The upper level of the channel is drawn by connecting successive tops, while the lower one joins bottoms.
This pattern can take three orientations: positive slope, negative slope, and zero slope. In the first of these, the trendlines track a phase of consolidation toward the upside, and the pattern is known as an Ascending Channel. Similarly, in the second, the price trends downward, with the formation being called a Descending Channel. The third type, where the trendlines are parallel to the time-axis, doesn’t have any particular name.
Like other consolidation patterns in TA, the upper line of a Parallel Channel is likely to pose resistance to the price, while the lower one may act as a point of support. Breaks above either of these lines can imply a continuation of the trend in that direction; an escape above the channel is bullish, and a fall under it is bearish.
Now, here is the chart shared by the analyst that shows the Ascending Channel that Ethereum has possibly been trading inside during the last couple of years:
As is visible in the above graph, the Ethereum price retested the upper level of this channel during the rally in the first quarter of last year. The cryptocurrency found rejection at the level and started on a downward trajectory that would eventually force it to retest the lower line.
ETH spent a bit of time making multiple touches of the line during the retest, but the pattern ended up holding up as the coin achieved a rebound. The resulting rally couldn’t take the price to the upper level, however, as it, in fact, fizzled out only mid-way through the journey. The asset has since been on a decline.
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Interestingly, a similar pattern was also witnessed in 2023, where a rejection halfway through the channel led Ethereum to a retest of the bottom line, which kickstarted the bull run.
In the chart, Martinez has highlighted how ETH’s upcoming price trend could look if a similar trajectory follows now as well. “If Ethereum $ETH is following an ascending parallel channel, a dip to the lower boundary at $2,800 could act as a launchpad for a move toward $6,000,” notes the analyst.
From the current price of the cryptocurrency, a bull rally to this $6,000 final target would imply growth of almost 82%.
ETH Price
Ethereum has been unable to make any notable recovery from its recent plunge yet as its price is still trading around $3,300.
Featured image from Dall-E, charts from TradingView.com
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