Ethereum holds above $2,400 with a potential breakout at $2,700, aiming for a 50% rally toward the $4,000 mark.
As Bitcoin rises 1% to record a new all-time high, Ethereum outperforms with a 3% surge and is currently trading at $2,632. The leading altcoin is forming a rounding bottom pattern, hinting at a potential breakout and a 50% rally ahead.
Ethereum Price Analysis
On the daily chart, Ethereum has maintained a sideways trend between $2,400 and $2,700 over the past week. However, the short-term consolidation remains above the 200-day EMA at $2,443, indicating underlying strength.
In the broader picture, Ethereum appears to be completing a rounding bottom pattern, with the neckline aligned with the 50% Fibonacci retracement level near $2,700. A breakout above this neckline could trigger a 50% rally.
This potential rally is calculated by adding the depth of the pattern to the breakout point. Based on Fibonacci analysis, the upside target aligns with the 100% Fibonacci level near $4,000.
Supporting this bullish scenario, the RSI has spiked into the overbought zone, reflecting growing bullish momentum. Additionally, the 50- and 100-day EMAs are approaching a bullish crossover, reinforcing the upward outlook.
On the downside, a breakdown below the 200-day EMA would invalidate the bullish setup and could push Ethereum down to the 50-day EMA near $2,154.
Rising Optimism Boosts Ethereum Derivatives
As Ethereum approaches a potential breakout, the derivatives market reflects rising bullish sentiment. Open interest has surged nearly 20%, reaching $32.44 billion, indicating growing trader participation.
This bullish sentiment is further confirmed by a positive funding rate of 0.0041% and $32 million in short liquidations over the past 12 hours, compared to just $10 million in long liquidations. According to CoinGlass data, this reflects a bullish narrative that could fuel a leverage-driven rally.
Analyst Targets $3,000 With Bullish Pattern Breakout
Crypto analyst Ali Martinez shares an optimistic post on the Ethereum price rally, targeting a potential surge towards $3,000. The analyst highlights a breakout of an inverted head-and-shoulders pattern in the hourly time frame.
If #Ethereum $ETH breaks above the $2,588 resistance, it could trigger a bullish move toward $3,000. pic.twitter.com/yRrHAoyhnk
— Ali (@ali_charts) May 21, 2025
Martinez expects a move above the 1.78 Fibonacci level, with the $3,000 mark as a likely target. However, Ethereum must maintain support above the $2,585 neckline to confirm and sustain this bullish breakout.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
