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An analyst revealed what would need to happen for Ethereum to rise towards the $6,000 level, based on the pattern currently forming in its price.
Ethereum appears to be moving within an ascending channel recently
In new mail On X, analyst Ali Martinez discussed the pattern that Ethereum is likely to follow recently. The pattern in question is “Rising channel“From technical analysis (TA).”
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Parallel channels It is formed when the price of an asset consolidates between two parallel trend lines. The upper level of the channel is drawn by connecting successive highs, while the lower level connects the troughs.
This pattern can take three directions: positive slope, negative slope, and zero slope. In the first, the trend lines follow a phase of consolidation towards the upside, and the pattern is known as an ascending channel. Likewise, in the second case, the price is trending downward, with the formation called a descending channel. The third type, where the trend lines are parallel to the time axis, does not have any specific name.
Like other TA consolidation patterns, the upper line of the parallel channel will likely form price resistance, while the lower line may act as a support point. A break above either of these lines could indicate a continuation of the trend in that direction; Breaking above the channel is bullish, breaking below it is bearish.
Now, here is the chart shared by the analyst that shows the ascending channel that Ethereum has likely been trading within for the past two years:
As can be seen in the chart above, Ethereum price retested the upper level of this channel during the rally in the first quarter of last year. The cryptocurrency found rejection at the level and started a downward trajectory that would eventually force it to retest the bottom line.
ETH spent some time making multiple touches to the line during the retest, but the pattern ended up holding as the coin made a recovery. However, the resulting spike could not push the price to the upper level, because it actually only faded away halfway through the journey. The original has since been on a decrease.
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Interestingly, a similar pattern was also seen in 2023, where a rejection midway through the channel led to Ethereum retesting the final result, starting an uptrend.
In the chart, Martinez highlighted what ETH’s next price trend could look like if it follows a similar path now as well. “If Ethereum $ETH follows an upward parallel channel, a drop to the lower limit at $2,800 could serve as a starting point for a move towards $6,000,” the analyst notes.
From the current price of the cryptocurrency, an upside rally to this ultimate target of $6,000 would mean growth of approximately 82%.
Ethereum price
Ethereum has not been able to make any notable recovery from its recent decline so far as its price is still trading around $3,300.
Featured image by Dall-E, charts from TradingView.com
