Several technical indicators support Ethereum pushing above $4,000
TLDR
It has crossed the $3,670 resistance since March 2024 and after three failed attempts since March 2024, Ethereum is showing promising signs for a breakthrough of $4,000. Technical analysis shows the formation of a head and shoulders pattern. $4,150 ETH is waiting for its position in the upward trending parallel channel target. The $6,000 BlackRock Ethereum ETF has added institutional support by accumulating more than 1 million ETH.
Ethereum crossed $3,670, a sign of the fourth approach to the stubborn $4,000 resistance level in 2024. The second largest cryptocurrency by market capitalization is currently trading at $3,696, a 1.9% increase in the last 24 hours.
The recent price action reversal has formed a technical pattern known as head and shoulders, which is typically considered a bullish indicator by market analysts. This design consists of three basins – a low central basin (head) flanked by two high shoulders (shoulders).
Cryptocurrency analyst Trader_XO highlighted this formation on social media platform X, suggesting that multiple tests of the $4,000 level would eventually add to the possibility of growth. The patterned collar, which serves as a key protective layer, closely matches the $4,000 price point.
$ETH
I said what I expected in my last tweet and live on the 22nd
Barring any returns to the gray zone, expectations remain
4k 4th hit = higher probability of breaking pic.twitter.com/IkuT3OpFRB
— XO (@Trader_XO) January 3, 2025
Another analyst, Dagan, provided more context for additional price targets, suggesting that a break above $4,150 could trigger more significant price action. Dagan described the current configuration as a “textbook continuation design” and said, “Nothing has really started yet.”
As noted by analyst Ali Martinez, the market structure shows that Ethereum is in an ascending parallel channel. This technical formation consists of two upward-sloping parallel lines containing price action, suggesting a path towards $6,000.
$ETH will have to pay above $4150 to start the real fun. Nothing has really started yet.
This is a continuing design of the textbook leading to a strong push, but it will take time to fully develop. pic.twitter.com/k8uuGPee2n
— Daghan (@DaghanTrading) January 6, 2025
BlackRock's Ethereum ETF has accumulated more than 1 million ETH, indicating growing institutional interest in the asset. This stock adds another layer of support to the existing market structure.
Technical indicators include a reset in the weekly Relative Strength Index (RSI), which some analysts interpret as a potential source for price action. RSI measures momentum and can indicate whether an asset is oversold or overbought.
The $4,000 price level has proven to be a challenging resistance point, Ethereum has tested it three times since March 2024. Every previous attempt has failed, making this fourth approach particularly interesting for market watchers.
Market data shows that Ethereum's current market capitalization exceeds $450 billion, making it the second largest digital asset. The price shows an increase of 1.9 percent compared to the previous day's trading.
An upward parallel channel pattern seen in price action suggests a persistent rally, with traders forming higher lows and higher highs. This type of price movement is often preceded by larger directional movements.
Some analysts set targets as high as $8,047, although such predictions depend on Ethereum's early resistance at $4,150. Current pattern development suggests a measured approach to these steps rather than spontaneous movements.
The reverse head-and-shoulders pattern that is being worked on now requires confirmation of the cut above the neckline. Traders often look for a successful test of this level as support after the initial discovery.
Trading volume has remained consistent throughout this pattern formation, providing stability to the current price structure. This stability supports the technical setup shown on the charts.
The most recent price action shows Ethereum holding above the $3,670 support level, which previously served as resistance. This price level now serves as the basis for a move towards $4,000.
At press time, Ethereum is trading at $3,696 on major exchanges, maintaining its position in the upper channel pattern as it nears the critical $4,000 resistance level.
