An analyst has revealed what could happen for Ethereum to rally towards the $6,000 mark, based on a pattern that is currently forming in its price.
Ethereum appears to be moving within an ascending channel recently
In new post on X, analyst Ali Martinez has discussed a pattern that Ethereum may be following recently. The pattern in question is “Channel going up” from technical analysis (TA).
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Parallel channels form when the price of an asset consolidates between two parallel movements. The upper level of the channel is drawn by connecting continuous tops, while the lower one joins the bottom.
This pattern can take three directions: positive slope, negative slope, and zero slope. In the first of these, the trend lines track a level of consolidation towards the top, and the pattern is called an Ascending Channel. Similarly, in the second one, the prices are going down, with the formation being called a Descending Channel. There is no special name for the third type, where the trend lines are parallel to the time axis.
As with other consolidation patterns in TA, the upper line of the Parallel Channel is likely to stand in opposition to the price, while the lower one may act as a support point. A break above one of these lines can mean a continuation of the trend in that direction; an escapeabove the channel is bullish, and a fall below it is very bearish.
Now, here is the chart shared by the analyst that shows the Ascending Channel that Ethereum could be trading in during the last two years:
As shown in the graph above, the price of Ethereum reconfirmed the high level of this channel during the rally in the first quarter of last year. The cryptocurrency found rejection at the level and started a downward path that would ultimately lead to a reconfirmation of the bottom line.
ETH spent some time making multiple touches of the line during the retest, but the pattern ended when the coin recovered. The resulting rally was unable to take the price to a new high, however, as it was, in fact, exiting only halfway through the trip The asset has since been a decline.
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Interestingly, a similar pattern was also seen in 2023, where a rejection halfway through the Ethereum channel led to a retest of the lower line, which started the bull run.
In the chart, Martinez has shown how the upcoming price movement of ETH could look if a similar path continues now as well. “If Ethereum $ETH follows an ascending parallel channel, a dip to the lower limit at $2,800 could be the starting point for a move to $6,000,” the analyst said.
From the current price of the digital currency, a bull rally to this final target of $6,000 would mean a growth of almost 82%.
The price of ETH
Ethereum is still unable to recover significantly from the recent fall as its price is still trading around $3,300.
Featured image from Dall-E, charts from TradingView.com
