Key takeaways:
A bullish formation on the ETH chart suggests a rise to $10,000, with $5,000 as the key resistance point.
Experts emphasize that short-term fluctuations may occur before ETH enters a prolonged bullish expansion phase.
A rise to $5,100 could lead to $5 billion in short position liquidations.
Ether (ETH) is displaying optimistic technical indicators, with crypto analyst Jelle highlighting a “megaphone pattern” on the weekly chart aiming for the $10,000 target.
The megaphone, also recognized as a broadening formation, indicates widening price movements with sequentially higher highs and lower lows. A confirmed breakout above resistance can often trigger significant rallies, although the pattern may turn bearish if momentum falters.
Currently, the immediate resistance is positioned at $5,000. Surpassing this level could liquidate an estimated $5 billion in total short positions, which could extend the megaphone rally.
Failure to break through the $5,000 level might result in a retreat toward the 12-week simple moving average (SMA, blue line) around $3,500 or the lower support level of the pattern at $3,000, coinciding with the 25-weekly SMA (orange line). Volume confirmation is vital, as low participation increases the likelihood of a false breakout.
Crypto trader Merlijn emphasized the potential for a bullish breakout and noted that ETH is up against a dense sell wall near $5,100, “a level that attracts whale interest.”
The trader anticipates liquidity at this area to act as a magnet, eliminating over-leveraged shorts. “Be proactive, not reactive,” Merlijn remarked, suggesting that whales could push prices into that liquidity zone.
Related: Ethereum‘s best month ever puts $7K ETH price within reach
Analysts predict ETH could remain “bullish for years”
Although short-term fluctuations dominate discussions, technical analyst Jackis asserted that ETH is “remarkably bullish for years ahead,” emphasizing that the asset has recently broken out of a 4.5-year institutional accumulation range.
Jackis noted that the previous four-year cycle effectively concluded in December 2024, paving the way for a new period of structural expansion.
However, Jackis cautions about potential mid-term shakeouts before the next upward movement. ETH has encountered multiple rejections from its all-time highs and is currently testing its sixth diagonal trendline resistance, a point that historically leads to breakouts after repeated attempts.
A deeper retest into support, akin to Bitcoin’s $25,000 correction in mid-2023, could incite fear-driven sell-offs before the larger uptrend resumes. The correlation between Bitcoin and Ether should also be monitored.
According to ecoinometrics, despite ETH’s recent strong performance, it remains closely correlated with BTC. In an X post, the market analysis platform stated,
“ETH is performing better than BTC in price terms, yet the correlation tells a different story. Over the past five years, ETH’s correlation with BTC has averaged above 0.8, and currently, it remains around that level.”
Jackis highlights that even with potential near-term corrections, the long-term outlook remains sound. Sustained stability above the 2021 all-time highs of $4,880 would indicate immediate continuation.
Related: BlackRock Bitcoin ETF holdings overtake Coinbase, Binance; ETH may be next
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
