Ethereum Tests Massive Falling Wedge – Breakout Could Target $4K Cycle Highs

Ethereum (ETH) has been trading within a narrow 4-hour range between $3,150 and $3,500, leaving investors frustrated with its lackluster performance in recent weeks. As other assets in the crypto market make strides, Ethereum’s sideways movement has caused many to question whether it can regain its momentum this year. The prolonged consolidation has dampened sentiment, with some investors beginning to lose patience and faith in ETH’s ability to deliver substantial returns.

However, optimism remains among technical analysts who see Ethereum nearing a critical inflection point. Top crypto analyst Daan recently shared a technical analysis on X, highlighting a massive falling wedge pattern forming on Ethereum’s chart. This setup is widely considered a bullish reversal indicator, with the potential to spark significant upward movement if the price breaks out.

According to Daan, a breakout from this falling wedge would likely pave the way for Ethereum to test the $4,000–$4,100 level, offering a glimmer of hope for bullish investors. Such a move could reinvigorate market confidence and set the stage for Ethereum to reclaim its status as a leading altcoin. For now, all eyes are on ETH as traders await confirmation of the next big move in this highly-watched range.

Ethereum Facing Serious Risks

Ethereum has remained in a downtrend since late December, struggling to regain momentum as bearish sentiment continues to dominate the market. The lackluster price action has left investors and analysts increasingly concerned about the possibility of a deeper correction, as ETH consolidates near critical support levels. While some remain hopeful for a turnaround, the current outlook suggests Ethereum faces significant challenges ahead.

Top crypto analyst Daan recently shared his insights on X, highlighting a massive falling wedge pattern on Ethereum’s chart. This pattern is often regarded as a bullish reversal signal, with the potential to trigger a significant breakout if confirmed. According to Daan, a successful breakout could propel ETH toward the $4,000–$4,100 range, revisiting its cycle highs. However, he also expressed caution, suggesting that if ETH does manage to reach this level, it may encounter strong resistance, potentially leading to another sharp rejection.

Daan emphasized the importance of monitoring the falling wedge trendline, noting that it will play a crucial role in determining Ethereum’s next move. For now, the market remains in a wait-and-see mode, with ETH navigating a precarious balance between bullish breakout potential and the risk of further downside.

As Ethereum hovers around key levels, traders and investors are closely watching for signs of a definitive move. A breakout above the falling wedge could breathe new life into ETH and reignite optimism, while failure to hold support may lead to an extended period of consolidation or even a deeper correction. The coming days will be critical in shaping Ethereum’s trajectory, with its performance likely to influence broader market sentiment.

ETH Consolidates Above Key Demand

Ethereum (ETH) is trading at $3,322 after enduring several days of choppy price action, reflecting the broader uncertainty in the crypto market. The price has struggled to gain momentum as it remains stuck in a tight range, testing the patience of investors and traders alike. To ignite an uptrend, bulls must hold the critical $3,300 support level, which has served as a key demand zone in recent sessions.

A decisive push above the $3,500 resistance level, which has capped ETH’s upward movement for weeks, is essential to confirm a bullish breakout. Clearing this level would likely reinvigorate market sentiment and attract fresh buying interest, setting the stage for Ethereum to target higher price levels in the coming days.

However, the downside risks are significant. If ETH fails to hold the $3,300 mark, it could trigger a wave of selling pressure, leading to a deeper correction. Such a move could also cause capitulation among investors who have grown disillusioned with Ethereum’s underperformance compared to Bitcoin and other altcoins.

Featured image from Dall-E, chart from TradingView

Source