Ethereum is on the rise, recently hitting a two-week high of $3,697 after a 0.8% increase at the latest update. Over the past week, the Ethereum price has surged by more than 9%, showing strong stability above the $3,500 mark. This sets the stage for a potential retest of the coveted $4,000 threshold in the coming days. What’s particularly exciting is the emergence of an inverse head-and-shoulders pattern, signaling the possibility of breaking through the $5,000 ceiling.
This inverse head-and-shoulders pattern on the weekly chart is a key indicator of a potential trend reversal. It consists of three successive troughs where the left shoulder experiences an initial decline. This is then followed by a deeper descent, forming the inverted head due to significant selling pressure. The right shoulder appears as a lower high and is nearly as deep as the left shoulder. The neckline of the pattern connects the shoulders and coincides with the highest point of the head. The completion of this pattern occurs once the price breaks above the neckline after the formation of the right shoulder.
Using the price distance from the head’s tip to the neckline allows us to forecast the potential target for Ethereum price. By applying this method, we can anticipate a potential gain of $1,683.30. Adding this to the neckline could result in a price target of $5,717, indicating a remarkable 56.75% increase from the current value. This gain would also push Ethereum past its all-time high of $4,878 by about 17%.
To effectively trade this head-and-shoulders pattern, confirmation of the breakout above the neckline is crucial. Traders should be cautious and place a stop loss just below the right shoulder to mitigate risks in case the trend reverses. Keeping an eye on major psychological price barriers such as $4,000, $4,500, and $5,000 will be essential as the market fluctuates.
With its impressive recent performance and bullish patterns, Ethereum may well be on the brink of a breakout that could send prices soaring well beyond expectations. For crypto enthusiasts and investors alike, the landscape appears filled with promise, making now an exhilarating time to keep a close watch on Ethereum’s price movements.
