Ethereum Eyes $4,000 After Bullish Breakout
Ethereum (ETH), the second-largest cryptocurrency by market capitalization, is making headlines as it shows significant bullish momentum. Over the past 24 hours, the cryptocurrency has surged by nearly 7%, putting the $4,000 price level back on the radar for traders and investors. However, while the technical patterns signal strength, potential risks could still affect Ethereum’s price journey.
The Cup-and-Handle Breakout: What Does It Mean?
On the 12-hour chart, Ethereum exhibits a classic cup-and-handle pattern, a bullish indicator commonly associated with market trend continuation. The breakout occurred as Ethereum pierced through a slightly downward-sloping neckline, reflecting strong buyer interest and increasing confidence in the asset’s upward trajectory.
This pattern suggests a potential target of $4,010 based on historical projections, but the road to that goal might face hurdles. Volume growth during the breakout has been promising, which reduces the possibility of a false breakout. Still, Ethereum’s ability to sustain and build upon this momentum depends on critical factors like market participation and on-chain activity.
Key Levels to Watch for Ethereum’s Momentum
For Ethereum’s breakout to hold, it’s crucial that the coin sustains its position above the $3,250-$3,270 support area. Furthermore, surpassing the $3,360-$3,380 range could negate risks of a bearish divergence, as indicated by Ethereum’s Relative Strength Index (RSI). A clean close above these levels would increase the likelihood of moving towards $3,580, $3,910, and ultimately the coveted $4,000 mark.
On the downside, if Ethereum loses momentum and drops below $3,250, technical indicators point to the $3,180 and $3,050 zones as significant support areas.
Analyzing Risks: RSI and On-Chain Data
While Ethereum’s price movement appears bullish, caution is warranted. The Relative Strength Index (RSI) on the 12-hour chart shows early signs of a bearish divergence, which may indicate weakening buying power. Additionally, Net Unrealized Profit/Loss (NUPL) metrics reveal that more short-term holders are sitting on profits, which could increase selling pressure.
However, it’s not all bad news. On-chain analysis suggests that short-term holders are currently holding onto their positions instead of selling. Spent coins within the 30–60 day range have decreased by 80%, showing trader patience and increasing the probability of continued price stability.
What This Means for Traders & Investors
Ethereum continues to attract attention, with its strong technical patterns and rising volume signaling bullish sentiment. For those looking to capitalize on this momentum, timing and keen observation of key price levels are paramount. While $4,000 is within sight, maintaining upward momentum is essential to achieving these price targets.
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Conclusion: A Balancing Act
Although Ethereum’s technicals support potential upward movement, risks like bearish RSI divergence and profit-taking should not be overlooked. If its volume momentum remains strong, buyers are patient, and critical levels hold, Ethereum could pave the way toward $4,000 and beyond. As always, do your research and consider consulting a financial professional before making investment decisions.
Disclaimer: The content of this article is for informational purposes only and should not be considered financial advice. Conduct thorough research and consider your financial position before investing in cryptocurrencies.
