TLDR
- Ethereum has surpassed $3,670 resistance and is showing promising signs of a possible breakout of $4,000 after three failed attempts since March 2024
- Technical analysis shows a bullish inverse head and shoulders pattern forming, indicating a possible trend reversal
- Analyst Daghan predicts a potential rise to $8,047 if ETH breaks above $4,150
- ETH maintains its position within an ascending parallel channel with a target of $6,000
- BlackRock’s Ethereum ETF has accumulated over 1 million ETH, gaining institutional support
Ethereum has risen above $3,670, marking its fourth approach to stubborn $4,000 resistance in 2024. The second largest cryptocurrency by market cap is currently trading at $3,696which represents an increase of 1.9% in the last 24 hours.
Recent price action has formed a technical pattern known as an inverted head and shoulders pattern, which is typically viewed as a bullish indicator by market analysts. This pattern consists of three hollows – a lower central hollow (the head) flanked by two higher hollows (the shoulders).
Cryptocurrency analyst Trader_XO highlighted this formation on social media platform X, suggesting that multiple tests of the $4,000 level increase the likelihood of an eventual breakout. The pattern’s neckline, which serves as a key resistance level, closely aligns with the $4,000 price point.
I outlined my expectations for the previous tweet and the livestream on the 22nd
Unless there are setbacks in the gray area, expectations remain the same
4th tip of 4k = probability of it breaking out higher https://t.co/wi6hNw8WtC pic.twitter.com/IkuT3OpFRB
– XO (@Trader_XO) January 3, 2025
Another analyst, Daghan, provided additional context for potential price targets, noting that a break above $4,150 could trigger stronger price action. “Nothing has really started yet,” said Daghan, describing the current setup as a “textbook continuation pattern.”
The market structure shows Ethereum maintaining its position within an ascending parallel channel, as observed by analyst Ali Martinez. This technical formation consists of two upward sloping parallel lines that contain price action and suggest a possible path towards $6,000.
$ETH It needs to break $4,150 for the real fun to begin. Nothing has really started yet.
This is a textbook continuation pattern that will likely result in a strong momentum, but it takes time to fully develop. pic.twitter.com/k8uuGPee2n
– Daghan (@DaghanTrading) January 6, 2025
BlackRock’s Ethereum ETF has accumulated over 1 million ETH, showing growing institutional interest in the asset. This accumulation adds another layer of support to the current market structure.
Technical indicators include a reset in the weekly Relative Strength Index (RSI), which some analysts are interpreting as a potential springboard for price action. The RSI measures momentum and can signal whether an asset is oversold or overbought.
The $4,000 price level has proven to be a challenging resistance point Ethereum It has been tested three times since March 2024. Every previous attempt failed, making this fourth approach particularly noteworthy for market watchers.
Market data shows that Ethereum’s current market capitalization exceeds $450 billion, maintaining its position as the second largest digital asset. The price represents an increase of 1.9% compared to the previous day’s trading.
The ascending parallel channel pattern observed in price action suggests steady accumulation, with traders setting higher lows and higher highs. This type of price movement is often preceded by larger directional moves.
Some analysts are predicting potential targets of up to $8,047, although such predictions depend on Ethereum first breaking through the immediate resistance at $4,150. Current pattern development suggests a measured approach to these levels rather than sudden moves.
The inverted head and shoulders pattern currently forming would need to be confirmed by a final break above the neck line. Traders typically expect a successful retest of this level as support after the initial breakout.
Trading volume has remained constant throughout this pattern formation, providing stability to the current price structure. This stability supports the technical setup observed in the charts.
The recent price action shows Ethereum holding above the support level of $3,670, which previously acted as resistance. This price level now serves as the basis for possible moves towards $4,000.
At press time, Ethereum is trading at $3,696 on major exchanges, maintaining its position within the ascending channel pattern as it approaches the critical resistance level at $4,000.
