Ethereum price is showing signs of a breakout as one analyst has spotted the formation of an inverted head and shoulders pattern on its long-term 6-month price chart. The bullish formation has sparked predictions that Ethereum could soon rally to $12,000, a new all-time high for the second-largest cryptocurrency by market cap.
Ethereum Price Targets $12, Charts Show New Pattern
In an X (formerly Twitter) thread on Tuesday, cryptocurrency analyst Tony Severino posted a chart of Ethereum prices showing an inverted head and shoulders pattern, a technical analysis indicator that signals a potential trend reversal. This unique chart pattern has four key components: the left shoulder, the head, the right shoulder, and the neckline.
Typically, when the pattern is fully formed, and a cryptocurrency breaks above the neckline, it signals a possible shift from a downtrend to an uptrend. In Ethereum’s case, its price has been on a notable downward trajectory, falling more than 8% over the past week.
Despite the recent drop in Ethereum’s price from highs of over $4,000 to below $3,500, Severino remains optimistic about Ethereum’s trend reversal potential and predicts a bullish price target of $12,000 for the top altcoin.
Looking at the analyst’s price chart, the left shoulder of the inverted head and shoulders formed in 2021, while the head appeared during Ethereum’s price crash in late 2022, marking the lowest point of the pattern.
Furthermore, the right shoulder of the inverted head and shoulders pattern has completed, and Ethereum recently tested the neckline – a key resistance level of the horizontal trendline. At the time, Ethereum broke through $3,400, confirming the bullish trend reversal that often occurs with this chart pattern.
Looking at the price chart, the distance between the head and neckline is approximately 265.84%, which means that if the pattern develops as expected, Ethereum could rise to between $10,000 and $12,000. This bullish trend outlook is further supported by the upward sloping channel of the inverted head and shoulders, and Severino’s Ethereum price target may be in line with the trajectory of the channel.
Ethereum whale accumulation trend surges
Ethereum is currently trading at $3,493 after surging 2.3% in the past 24 hours, with an analyst known as “Mr. Crypto” revealing that whales are on a buying spree. The analyst shared a chart showing Ethereum’s balance on accumulation addresses.
He revealed that Ethereum whales are buying ETH tokens exponentially, steadily increasing their holdings since 2017. The sharp increase in accumulation suggests that investors may be positioning themselves ahead of bullish price action.
The red arrow in the analyst's chart also shows that the ETH balance of the accumulation address has surged significantly in recent months. Most wallets associated with this surge in accumulation have seen small outflows, indicating long-term holding behavior by investors.
