An analyst has explained how Ethereum could see a run toward the $6,000 level if this historical pattern continues to hold for the asset’s price.
Ethereum Ascending Channel Could Reveal Its Next Destination
In a new post on X, analyst Ali Martinez has discussed a pattern that the 1-week price of Ethereum has potentially been following during the last couple of years.
The pattern in question is the “Ascending Channel” from technical analysis (TA), which is a type of Parallel Channel. In a Parallel Channel, the asset consolidates between two parallel trendlines, with the upper level connecting successive tops and the lower bottoms.
These two levels are slopped upwards in the case of an Ascending Channel, as already hinted at by its name. Thus, an Ascending Channel only forms when the asset sets higher highs and lows.
The lower level of the pattern can support the price, while the upper one may act as resistance. If either of these levels break, the asset could see a continuation of trend in that direction; a surge above the top line can be a bullish sign, while a drop under the bottom line can foreshadow a bearish outcome.
There is also another type of Parallel Channel, called the Descending Channel, which works much in the same way as the Ascending Channel, except for the fact that it points downwards.
Now, here is the chart shared by Martinez that shows the Ascending Channel that the 1-week Ethereum price could be trading inside right now:
As displayed in the above graph, the 1-week Ethereum price has recently been retesting the bottom level of this potential Ascending Channel pattern. The analyst has highlighted what happened the last few times that the coin made a retest of this line.
“Every bounce off this channel’s lower boundary has historically led to an average 130% price increase for Ethereum,” notes Martinez. Thus, if the Ascending Channel continues to hold for the cryptocurrency, it could benefit from another surge shortly
“If this pattern holds, a similar move could push ETH to $6,000—provided the $2,300 support level stays intact,” says the analyst. This support level naturally corresponds to the channel’s bottom line, a drop beyond which could potentially invalidate the formation.
Given this pattern forming in its weekly chart, It remains to be seen how the Ethereum price will develop in the coming months.
ETH Price
Ethereum has enjoyed a sharp 7% rally during the past 24 hours, which has taken its price above the $2,600 mark.
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Keshav Verma
https://www.newsbtc.com/ethereum-news/ethereum-6000-if-this-pattern-holds-analyst-says/
2024-10-15 08:30:11
