Ethereum is forming a bullish cup-and-handle pattern above its 200-day EMA as it trades around $2,509. Will ETH break out above $3,000?
Ethereum continues to consolidate within a range, maintaining dominance above its 200-day EMA at $2,457. As ETH’s consolidation persists, a bullish cup-and-handle pattern is emerging on the daily chart. Will Ethereum break out of the pattern for an extended rally?
Ethereum Price Analysis
On the daily chart, Ethereum displays a rounding-bottom reversal between February and May, with the neckline aligning with the 61.80% Fibonacci level at $2,712. Currently, Ethereum is moving sideways just below this neckline, supported by the 200-day EMA at $2,457.
The sideways movement and U-shaped reversal complete the rounding-bottom pattern on the daily chart. Furthermore, the reversal has resulted in a bullish crossover between the 50-day and 100-day EMA lines, signaling a potential short-term trend reversal and increasing the chances of a breakout.
At present, Ethereum is trading at $2,509, near the lower boundary of the pattern and the 200-day EMA, while the RSI line continues to decline. This indicates weakening momentum and a hidden bearish divergence, suggesting the possibility of a breakdown.
In such a scenario, the immediate support lies at the 50% Fibonacci level at $2,386, followed by the 38.20% level at $2,098. However, if the broader market recovers, a bullish breakout from the pattern is possible. This could trigger an uptrend toward the 78.60% Fibonacci level at $3,255.
Optimistically, a confirmed breakout could extend the rally toward the 100% Fibonacci level at $4,108.
Derivatives Market Remains Hopeful
Despite the hidden bearish divergence in the RSI hinting at a potential pullback, the bullish chart pattern has sparked increased optimism in the derivatives market. Ethereum open interest has risen by 2.52%, reaching $34.65 billion, with a slightly elevated funding rate of 0.0046%.
This suggests growing bullish activity in the market. However, long liquidations have climbed to $25 million over the past 24 hours, while short liquidations remain lower at $15.66 million.
Currently, the long-to-short ratio over the past 24 hours stands at 0.9767, indicating a slight bearish bias in the market.
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.
