Ethereum Recovers From Drop Below $3,000: Analyst Points At 2021 Rally Similarities

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Following the dip on Monday, I found myself holding Ethereum (ETH) at prices not seen since November. Despite dipping below crucial support levels, various market analysts are still optimistic, forecasting a significant surge for this cryptocurrency during the current quarter.

Ethereum Drops To Two Month Lows

To begin the week, Ethereum experienced a substantial drop, moving down from its weekend price range to a level not seen in two months. Throughout the weekend, Ethereum maintained a fluctuating position between approximately $3,200 and $3,340 following its recovery from last week’s low prices.

During this presentation, crypto expert Ali Martinez highlighted some crucial points about Ethereum’s market behavior. Specifically, he identified the most significant resistance levels for ETH as being between $3,360 and $3,450 – a point where approximately 4.37 million investors purchased around 6.47 million Ether tokens. Additionally, Martinez noted that the cryptocurrency’s key support lies within the price range of $3,066 to $3,160, where about 4.12 million addresses had previously bought around 4.9 million Ether tokens.

During the price adjustments in December, Ethereum momentarily touched its crucial support level before rebounding following the declines. Notably, for the first instance since November 9, the leading altcoin dipped below this vital support, reaching a low of $2,920 on Monday.

Following a 12% drop from the weekend’s peak prices, Ethereum touched its post-election price zone, indicating that the $2,900 price band serves as a strong support level. Rapidly regaining momentum, Ethereum jumped by 9%, reaching the $3,100-$3,200 range.

Cryptocurrency investor Miky Bull sees ETH’s current trend as an “ideal scenario for a major turnaround.” He suggests that this could be the turning point leading to a breakout from Ethereum’s inverted head and shoulder formation.

It’s worth noting that, according to multiple analysts, the second largest digital currency in terms of market value is developing an inverted head and shoulder pattern over several months. This pattern has been taking shape with the left ‘shoulder’ roughly forming at the $2,800 price level.

Rekt Capital proposed that if there’s a minor retreat near the $3,000 price point, Ethereum might form an upward-sloping part (the “right shoulder”) in its chart pattern. On the other hand, Miky Bull expressed optimism about a bullish setup aiming for the $7,000 price level.

ETH Resembles 2021 Trajectory

According to Analyst Crypto Bullet, the price movement of Ethereum appears similar to how it behaved in 2021. The chart indicates that Ethereum exhibited a Double Top pattern during its surge about three years back. Later, Ethereum dropped below the crucial support level of $3,100, validating this pattern.

After two weeks of consolidation, it surged back up to a new all-time high (ATH) for Ethereum. According to the analyst’s analysis, yesterday’s dip seems to be part of a repeat pattern. If this holds true, Ethereum could potentially reach its all-time high once more, representing its “worst-case scenario”.

Daan Crypto Traders pointed out Ethereum’s remarkable early-year performance, emphasizing that “ETH’s returns in the initial weeks of the year are quite astonishing.

As a crypto investor, I’ve been closely watching Ethereum’s performance, and according to CoinGlass data, it’s had mostly negative weekly returns in early 2024 but has shown a positive streak over the past six weeks as February neared. This trend might indicate that Ethereum’s downward spiral could potentially reverse in the upcoming weeks. However, I’ve been advised to consider quarterly returns instead for a more comprehensive understanding of seasonality patterns before making any decisions.

As of this writing, ETH is trading at $3,230, a 3% increase in the daily timeframe.

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2025-01-15 09:40