With Ethereum (ETH) facing sustained resistance at the $4,000 level, technical indicators suggest that the second-ranked cryptocurrency by market capitalization might be building up for a higher target.
In particular, prominent cryptocurrency trading expert Ali Martinez has pointed out that ETH has been trading within an ascending parallel channel since June 2022, creating a pattern that could pave the way for the $6,000 target, he said in an X post on January 5.
An ascending parallel channel is a bullish pattern signaling higher highs and lows, indicating steady upward momentum and a long-term uptrend. Price consolidations within the channel often present buying opportunities.
Picks for you
As long as the channel holds, it suggests continued growth and potential breakouts. The analyst noted that Ethereum’s price has consistently followed this pattern.
Recently, Ethereum encountered resistance around the $4,000 level, leading to a temporary pullback. However, the channel’s midline has acted as a solid support zone, preventing deeper declines.
Martinez stated that this midline support is crucial for the record-high target. Notably, this $6,000 target aligns with the channel’s upper boundary, suggesting a potential surge of over 50% from current levels.
More bullish outlook for ETH
Meanwhile, another price outlook by pseudonymous cryptocurrency trading expert CryptoELITES in an X post on January 4 backed the bullish outlook for ETH. The analyst noted that Ethereum has been forming a symmetrical triangle pattern for months, and the asset is now approaching a key resistance level that could trigger significant upward momentum.
To this end, the analyst noted that the next key targets to look out for include $5,000, $7,500, and potentially even $15,000 if the rally gains enough traction.
As things stand, Ethereum’s next key target is at the $4,000 level, and if historical performance replicates, this level is potentially achievable in January 2025. Specifically, January has historically emerged as one of the strongest months for ETH.
For instance, in the last eight years, the asset had positive returns in January in five of those years.
Overall, Ethereum’s average return in January is 21.2%. The highest return was 78.51% in 2021, followed by 52.01% in 2018 and 39.28% in 2020, all setting bullish trends.
However, negative returns occurred in 2022 (-26.89%) and 2019 (-20.23%), reflecting occasional volatility.
ETH price analysis
By press time, Ethereum was trading at $3,606.79, having rallied almost 0.80% in the last 24 hours. The decentralized finance (DeFi) asset has rallied over 6% on the weekly chart.
Notably, Ethereum’s technical setup and general market sentiment support the possibility of a price rally.
Specifically, the asset’s 50-day simple moving average (SMA) sits at $3,518.40, slightly below the current price, reinforcing the upward trend.
Meanwhile, the 200-day SMA is at $3,051.34, further supporting long-term bullish sentiment. The 14-day relative strength index (RSI) is at 58.04, suggesting Ethereum is approaching overbought territory but remains in neutral conditions.
Featured image via Shutterstock
